STATE OF CALIFORNIA OFFICE OF TAX APPEALS
BEFORE THE OFFICE OF TAX APPEALS
STATE OF CALIFORNIA
IN THE MATTER OF THE APPEAL OF,
J. BRACAMONTE and J. BRACAMONTE,
APPELLANT.
_________________________________
)))))))
OTA NO. 18010932
TRANSCRIPT OF PROCEEDINGS
Sacramento, California
Monday, December 14, 2020
Reported by: ERNALYN M. ALONZOHEARING REPORTER
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS
BEFORE THE OFFICE OF TAX APPEALS
STATE OF CALIFORNIA
IN THE MATTER OF THE APPEAL OF,
J. BRACAMONTE and J. BRACAMONTE,
APPELLANT.
_________________________________
)))))))
OTA NO. 18010932
Transcript of Proceedings, taken at
400 R Street, Sacramento, California, 95811,
commencing at 10:12 a.m. and concluding
at 5:45 p.m. on Monday, December 14, 2020,
reported by Ernalyn M. Alonzo, Hearing Reporter,
in and for the State of California.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS
APPEARANCES:
Panel Lead: ALJ RICHARD TAY
Panel Members: ALJ JOHN JOHNSON
ALJ MIKE LE
For the Appellant: J. BRACAMONTEJ. BRACAMONTEGREGORY S. MARKOWPHILIP L. JELSMA
For the Respondent: STATE OF CALIFORNIA
FRANCHISE TAX BOARD
DESIREE MACEDORONALD HOFSDAL
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS
I N D E X
E X H I B I T S
(Appellant's Exhibits 1-18 were received at page 6.)
(Department's Exhibits A-BB were received at page 6.)
OPENING STATEMENT
PAGE
By Mr. Markow 7
By Mr. Hofsdal 18
APPELLANT'SWITNESSES: DIRECT CROSS
Juan Phil Bracamonte 27 69
Jacqueline Bracamonte 151 159
CLOSING STATEMENT
PAGE
By Ms. Macedo 186
By Mr. Hofsdal 188
By Mr. Markow 207
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 5
Sacramento, California; Monday, December 14, 2020
10:12 a.m.
JUDGE TAY: Good morning. We are opening the
record in the appeal of Juan and Jacqueline Bracamonte
before the Office of Tax Appeals, Case Number 18010932.
The official location on the notice of hearing is
Sacramento, California, and this hearing is being held
electronically.
A panel of three judges is hearing this appeal,
and we are coequal decision makers. My name is Richard
Tay, and I will be acting as the lead judge for the
purposes of conducting this hearing. Also on the panel
with me here today are Judges John Johnson and Mike Le.
Will the parties please introduce themselves for
the record, beginning with the Appellant. Please state
any title you wish to have as part of the record as well.
MR. MARKOW: Thank you, Your Honor. This is Greg
Markow on behalf of the Appellants along with my partner,
Phil Jelsma. The Appellants are also present. That is
Juan Phil Bracamonte and Jacqueline Bracamonte.
JUDGE TAY: Thank you.
Franchise Tax Board?
MR. HOFSDAL: Yes. Good morning. And my name is
Ron Hofsdal, H-O-F-S-D-A-L. And with me is one of my
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 6
attorneys with FTB -- or one of the attorneys here at FTB,
Desiree Macedo.
JUDGE TAY: This is Judge Tay. Thank you,
parties.
The issues today are whether Appellants were
California residents in 2008; and whether Appellants have
shown error in FTB's proposed assessments for the 2008 and
2009 tax year.
Prior to the hearing we circulated the exhibits
submitted by both parties in a file we call the "Hearing
Binder". It contains Appellants' Exhibits 1 through 18
and Respondent's Exhibits A through BB. There were no
objections to admitting exhibits into evidence.
Is that right, Appellants?
MR. MARKOW: That is correct, Your Honor.
JUDGE TAY: And Franchise Tax Board?
MR. HOFSDAL: Yes, that is correct.
JUDGE TAY: Thank you.
The exhibits will now be admitted into the
evidence.
(Appellant's Exhibits 1-18 were received
in evidence by the Administrative Law Judge.)
(Department's Exhibits A-BB were received in
evidence by the Administrative Law Judge.)
We will start with opening statements. Appellant
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 7
will have 15 minutes. And so I would like to give them
the opportunity to start their opening statement now.
Appellants, please proceed.
MR. MARKOW: Thank, you Your Honor and thank you
to all the judges who are hearing this case. We
appreciate your attention. And thank you to FTB for its
professionalism in this proceeding. We have appreciated
working with them throughout this.
OPENING STATEMENT
MR. MARKOW: Just a very brief note.
Mr. Bracamonte sometimes is hard of hearing, so we may
need to repeat some things for him. I apologize for that,
and I hope that the panel and counsel will oblige him in
that regard.
This is a case about where people live. This is
a case about domicile. It is a case where we will see
over the next few hours a fair amount of minutiae in terms
of evidence regarding when and -- the Bracamontes left
California and went to Nevada; what they did when they
were in Nevada; when they came back to California. You
will see leases. You will see auto registrations. You
will see charge cards. But it's the minutiae of where
people are and what they do when they move places.
What we do know, and I think what everyone agrees
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 8
to, is that on December 31st, 2007, the Bracamontes were
both domiciled in/and residents of California. We also
know is that on January 1st, 2009, the Bracamontes were
domiciled in/and residence of Nevada. The question is
when did that change? At what point in the year 2008 did
the move from California to Nevada occur?
As the panel I'm sure is aware, the relevant
tests, which are set forth in the Bragg case and any
number of cases which we cite in our briefs, has to do
with domicile and has to do with residence. And there are
two separate ways a taxpayer can show that they are not
subject to California taxation in a particular year. This
case is, you know, presents both of the issues, but it
presents domicile in a way that many of the cases don't.
Most of the cases seem to assume that domicile
hasn't changed and focuses on second part the test, which
is residency. But we have some serious domicile issues in
this case, and here's why. The California income tax
regulations define domicile as the place in which a person
has voluntarily fixed the habitation of himself and
family, not for a mere special or limited purpose, but
with the present intention of making a permanent home.
And California courts have similarly described
domicile as the concurrence of physical presence in a
particular place with the intention to make that place
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 9
your home. In order to change one's domicile, a person
must actually move to a new state and intend to remain
there permanently or indefinitely. The person's actions
must clearly indicate a current intention to abandon the
old domicile and establish a new one. What you're going
to see when you take a look at the evidence is that's
exactly what happened here.
The Bracamontes moved to Nevada and intended to
remain there permanently and indefinitely. Now, how do we
know that? Well, the proof is that -- let's take a look
first at the history of their residency since February of
2008. They remain even today residents of Nevada. We
know, thus, that their intention was to abandon California
in favor of Nevada, and the past 12 years of their Nevada
residency prove it.
In response, what the FTB really says is, "Well,
they didn't spend all of their time in Nevada, and they
often returned to California. And that was true then, and
it remains true today. But the test for domicile rather
than residence doesn't involve counting numbers of days or
how often you come back to visit. It turns on the move,
which indisputably occurred by the end of February and --
that's February 2008 -- and intention to establish a new
domicile. And we can infer that very, very strongly by
the fact that the Bracamontes never came back. They left,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 10
and left California and have lived in Nevada for many,
many years now.
And so their -- their move into Nevada in
February 2008 has been proven by the passage of time that
that was their intention to remain in Nevada. To find
otherwise you would need to say, well, they rented an
apartment in Nevada. They did a whole bunch of stuff to
stay in Nevada, but they really didn't mean it. They
really meant to stay in California for a while and then by
the end of the year, well, they really had moved to
Nevada. That doesn't make any sense, and it doesn't fit
the domicile test.
So I think at the end of this, after you see all
the evidence, you're going to find that domicile for the
Bracamontes changes at least as of -- excuse me -- end of
February 2008. But even if you find that they didn't
change their domicile in February of 2008 and it happened
at some point in time later in the year, we had to have
examine the facts to determine whether the taxpayer was
outside the state for what the case is called "temporary
or transitory purposes, such that the taxpayer has
continued to be treated for tax purposes as a California
resident. Or conversely, whether their removal from the
state was not temporary or transitory, which they would be
treated as non-California residents for tax purposes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 11
When a California domiciliary, a person who is
domiciled in California, we in the state, it's
particularly relevant to determine whether upon their
departure the taxpayer substantially severed his or her
California connections and then took steps to establish
significant connections with his or her new place of
abode, or whether the California connections were
maintained in readiness for his or her return. And in our
prehearing, Judge Tay asked about the Mazer case, which
was a recent case where the taxpayer left a house a wife
and a family -- a young family in California to go work in
Singapore for a period of time.
And the question there and the case turned there
on whether they, you know, were ready to return. That
kind of fact just doesn't exist here. When you take a
look at the evidence what you're going to see is that the
Bracamontes left at the end of February. They rented an
apartment. They registered to vote. They established the
mailing address and started changing the mailing addresses
for all their bank accounts and other, you know, sort of
important business. They registered to vote. They got
driver's licenses. They started to get some medical care,
although, they were seeing some doctors in California for
the next couple of months as the transition occurred.
And, fundamentally, they took all the important
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 12
steps it took to move from California to Nevada at that
time at the end of February. That's not to say they
didn't do anything in California thereafter. They
certainly did. One of the things about moving to Nevada
is it's next door, and it's a pretty easy drive to get
from Nevada to California. So unlike if you were moving
all the way across the country where it's difficult and
timely and costly to return, if you move to Las Vegas,
which is what they did, it's pretty easy to hop in a car
and come back.
The evidence will show that they had children in
California. They had estate issues and elderly parents to
take care of, and they had some business to wrap up as
well. And so what happened was they -- and what the
evidence is going to show, and we hope you'll find is that
they moved to Nevada, and then they continued to -- and
they took the necessary steps -- and the important steps
of establishing that Nevada residency. And then over the
next few months they cleaned up their -- their California
business and terminated it.
I think also the Franchise Tax Board puts a lot
emphasis on real property ownership. But in this case,
it's really sort of unimportant and doesn't really
illuminate the issue. In 2008 the Bracamontes at the
beginning of the year owned a vacation home in Arizona and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 13
a house in Escondido. When they went to Nevada, they
weren't quite sure where they wanted to live, so they
rented an apartment. And the evidence will show they
immediately began looking for real property at that time.
They were able to locate it in September and
bought a house in September. But they didn't sell their
California house until 2017, which is nine years after
everyone agrees they moved. So the fact that they
maintained a house in California and didn't sell it
doesn't inform the idea of where they were domiciles or
residents. Because as we know, long after everyone
agreed, they were both domiciliaries and residents of
Nevada. They still owned the same California house. So
the fact that they bought a new house and didn't sell
their old house really doesn't illuminate when and where
they moved from and when they moved to Nevada.
We'll go through the Bragg factors in the case,
which are these so-called objective factors that you look
at to determine when people have changed their residence.
And it's things like a homeowner's property tax exemption,
which doesn't apply here. Automobile registrations. And
the evidence is going to be that they registered their
primary automobiles in Nevada in February of 2008. They
had a variety of boats and motorcycles and things that
were registered both in Arizona and California. And over
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 14
the next couple of years, those registrations changed as
they became relevant.
The driver's license is another Bragg factor, and
that occurred in February 2008. They obtained Nevada
driver's license. For voter registration, they changed
their registration in February. They no longer, after
February of 2008 voted in California. They voted in
Nevada. The address used in the state of residence on
their federal state returns in 2008 was in Nevada.
The other Bragg factors for personal and
professional associations including the state of the
taxpayer's employment, and what the evidence here is going
to show is that Phil was technically -- that -- that
Jacquelin had retired in 2001, I think. So she wasn't
working, and that Phil had been obtaining a W-2 at his
company, Jimsair. But, really, he had no job
responsibilities. He was just being paid. He owned the
company, so that was never a problem. But he was a W-2
employee with no day-to-day responsibilities.
The children's schools doesn't really matter.
Their children were adult and were in 2008. The bank and
saving accounts, those -- they start to change those
immediately in February of 2008 when they moved to Nevada.
Membership and social, religious, and professional
organizations changed over time. The Bracamontes as I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 15
understand it are not really participants in these things.
But to the extent they were, they moved them from
California to Nevada as they became relevant.
The use of professional services such as doctors,
dentists, accountants, and attorneys, and the evidence is
just going to show that they started seeing some doctors
almost immediately upon their move and then later in the
year. They hired attorneys in April in Nevada to change
their family trust from a California trust to a Nevada
trust. The maintenance and ownership of business
interest, and that did change, I think most importantly
for this case in mid-2008.
There were no professional licenses. There was
no ownership of investment real property. These are the
other Bragg factors. And we have no affidavits or
declarations from third parties regarding their residence,
the physical presence and property, including the location
approximately sizes and values of resident property, and
we touched on that a little bit already. Which is that
the Bracamontes were in a position to own multiple homes.
And so they bought a new home in Nevada in 2008.
They went to go find it. They looked for it, and then
they found it in September of 2008. But they had been
looking for it earlier and have lived in that home ever
since September of 2008, despite owning a home here in
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 16
California as well.
Where the taxpayer and spouse and children
reside, again, no minor children, and the Bracamontes were
together through all of this. Another difference between
this and the Mazer case. The telephone records, the
evidence is going to show that they obtained mobile phones
with Nevada phone numbers in February of 2008. The
origination point of the taxpayer's checking account and
credit card transactions, those are going to show a couple
of different things that the bank accounts were opened in
February of 2008 in Nevada and then shifted over finally,
I think, in July of 2008. They eventually closed the one
here.
And then the credit card transactions will show
where they were. And what the evidence is going to show
is that they spent a fair amount of time in California for
the couple of months after they moved wrapping things up.
That diminished over time and that credit card statements
pretty much reveal that.
And, lastly, the number and days the taxpayers
spends in California versus other states. And the
evidence is going to show in the year 2008 they spent a
little less than half of their time in California versus
other states and that tapered off as the year progressed
throughout the year as, again, they wrapped up their
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 17
business in California.
So those are the factors you look at. And when
you look at the key factors, the most objective factors,
you know, they were renting a place, registering to vote,
registering their car, getting a driver's license, getting
a phone number, getting bank accounts, getting a mailing
address, all of that was in February 2008. And everything
else happened over the rest of the year. And so I think
the weight of the evidence is going to show them.
We're going to ask you to find at the end of this
case that the Bracamontes moved to California -- excuse
me -- moved from California and to Nevada at the end of
February of 2008. And so by the 27th or 28th of February
they were both domiciled in and residents of the State of
Nevada.
So thank you for your attention to this, and we
look forward to showing you the evidence that shows and
proves what I've just told you today. Thank you.
JUDGE TAY: This is Judge Tay. Thank you,
Mr. Markow, for that.
FTB requested 30 minutes for its opening
statement, and so I will ask FTB to begin. And you have
until about 11:01.
MR. HOFSDAL: Thank you. I also promised I'd try
to get it closer to 15, and I think I'm there.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 18
OPENING STATEMENT
MR. HOFSDAL: So anyway, good morning.
Well, this appeal involves two tax years, the
2008 and 2009 tax years. The issue is the same, whether
the Appellants were residents of California on
July 18, 2008, when they, through a family trust, sold
their family business, Jimsair Aviation Services, for just
over $17 million under an installment stock purchase
agreement.
All the income at issue for 2008 and 2009 relates
to the installment sale. Jimsair, which provided services
such as fueling and hangering aircraft at San Diego's
international airport, was formed by Mr. Bracamonte's
father at about 1902. That's a blueprint.
In this opening statement I hope to put
California's policy related to the transition of residence
in context with the facts of this case. This will include
a discussion of the relevant timeline with a focus on the
time leading up to the sale of Jimsair on July 18, 2008.
A discussion of the Appellants' physical presence in
California which will overwhelmingly reflect that the
taxpayers continue to receive the very same benefits and
protections that they had received in the many years prior
to January 1st, 2008.
And, finally, in this opening statement I will
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 19
identify the facts and contentions that we agree with.
Then during my argument portion, Mr. Macedo will first
briefly discuss the penalty, and then I will proceed by
discussing the relevant facts and clarifying some of the
ambiguous statements made in Appellants' brief and in
Mr. Bracamonte's declaration.
And, finally, during the argument phase, I hope
to discuss the law, including how the recent decision of
Mazer applies to these facts and discuss how the code, the
regulation, and other published citable cases can guide
the decision-making process.
The purpose behind California's pursuant of
income taxation of residence is to ensure that individuals
who are physically present in the state enjoying the
benefits and protections of its laws and government
contribute to its support, regardless of the source of the
taxpayer's income. As pointed in Bragg and many other
cases, this purpose underlies all residency decisions.
Therefore, the ultimate question is in this
residency dispute is, whether these taxpayers received the
benefits and protections from California and, in fact, the
same benefits and protections they indisputably received
for many years prior to January 1, 2008, consistent with
other non-transients or whether they, in fact, severed
their connections to California to the extent that these
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 20
benefits in connection they received were either
inconsist -- excuse me -- were inconsistent with being
inside California for merely a temporary sojourn or simply
passing through California on the way to another place.
Respondent believes the answer is clear.
Appellants continue to receive substantial benefits and
protections from California at all relevant times. Here
is an example of a benefit and protection received by
Appellants during the relevant time. This benefit is
fairly atypical. Under a federal lawsuit involving
Mr. Bracamonte's former attorney, the issue is whether or
not the attorney was entitled to collect unpaid attorney's
fees under a verbal contract. Importantly, the period
under dispute involve a 2008 taxable year. In fact, the
sale of Jimsair was a triggering event.
As a defense, the Appellants sought the benefits
and protections of California law in asserting
California's two-year statute of limitations for verbal
contracts. Statute of limitations period in both Mexico
and Nevada was for a much longer period. In his motion
for summary judgment, which is included as Exhibit B,
Mr. Bracamonte argued at pages 8 and 9 and 10 that his
attorney's performance was directed from San Diego by a
San Diego resident, referring to himself.
In other words, Mr. Bracamonte represented to a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 21
federal court that during the 2008 tax year his attorney's
performance was directed from San Diego by him, a San
Diego resident. Based on this and like representations,
the court included that although currently a resident of
Nevada, Mr. Bracamonte is reported to have been a resident
of California at the time the legal services were
provided.
The court noted as an undisputed material fact
that the vast majority of the communications between
Mr. Bracamonte and his attorney were via e-mail or hand
delivered to Mr. Bracamonte who resided in San Diego at
the time. And in so doing, Mr. Bracamonte, based on his
representations to the federal court, received such
benefits and protections from California law that he was
ultimately able to significantly reduce his obligation to
his former attorney.
The timeline is important here. Prior to
January 1, 2008, Appellants were long-term residents of
California. Then after a brief stay in Arizona and Mexico
in 2009 -- in January, the taxpayers remained in
California continuously through February the 25th. Not a
single night in Nevada. On the 25th, the Appellants
checked into a Henderson, Nevada hotel. And over the next
two days arranged to rent an 1,150 square-foot apartment
in Henderson, Nevada for $895 a month.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 22
They obtained a PO Box with forwarding services
located next to the apartment, obtained a Nevada driver's
license using the PO Box, and registered to vote. On or
about February 27th, the Appellants checked out of the
hotel and soon, thereafter, returned to their California
home where they remained. Then on March 15th the
Appellants again checked into a Henderson, Nevada hotel,
and during the next few days took possession of the
apartment. Soon after taking possession of the Nevada
apartment, Appellants returned to their California home
and remained there for the next 11 days.
The cycle of living in their California home for
about a few weeks, traveling to either Nevada or Arizona
for about two days, plus or minus a day, continued
throughout the relevant period. Appellants provided a
summary of their whereabouts during the relevant time
period. In this account, which is also marked as
Exhibit F, pages 4, 5, and 6.
I'm not all that technologically savvy, so
Desiree is going to help me here.
Desiree, could you please put that up?
Now, these dates in and out of California and out
of Nevada and in and out of Arizona was provided by the
Bracamontes based on their recollection at the time. Now,
if you take this chart -- if you take their response and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 23
you color code them to a calendar, the result is striking.
Desiree, can you please --
So for the period January 1 to the sale of
Jimsair on or about July -- on or about July 18th, 2008 --
I just lost my screen here. Hold on one second.
On or about July -- on or about in July 17th, all
of the area here in red represents their physical present
stays in California, while all the areas in green
represents their physical presence in Nevada. And the
days marked in yellow, that represents their physical
presence in Arizona. The blank days are days they're on
vacation and -- for January, and that was in Mexico.
In total, of the 199 days of the year between
January 1, 2008, and July 18th, 2008, the taxpayer spent
133 days in California versus only 28 days in Nevada. Of
which many days, as we will show, was spent in a hotel.
The chart reflects that Appellants' trips to Nevada were
relatively short durations. More akin to a mini vacation
or a convenient stop while passing between their San Diego
home and their Arizona vacation property. On the other
hand, the chart reflects significant consecutive presence
in California during the relevant period.
In reviewing the Appellants' letter brief, there
were a few of Appellants' arguments, contentions, and
concessions that Respondent agrees with, including that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 24
the extensive time a taxpayer spends in a state when
compared to the time outside of the state is indicative of
residency. That the continued ownership of property and
maintenance of the same is indicative of residency, and
that the taxpayer maintains a substantial personal
residence in California.
That the location of family ties is also
indicative of residency, and that the taxpayers maintain
significant family relationships in California. That the
connections like voter registration, mail forwarding,
location of banks where investments are held, vehicle
registrations, and driver's licenses are less significant
because of taxpayer's ability to manipulate these factors.
That during the relevant time the Appellants
maintained significant business connections with
California, and that Appellants business relationships
required taxpayer's physical presence in California
through July 2008. And finally that the Appellants
maintained significant relationships with physicians,
attorneys, accountants, and investment advisors in
California during the relevant time period. Again, these
are some of the arguments, contentions, and concessions
made by Appellants in their opening letter brief.
That will conclude my opening statement. I think
I got it below 15 minutes. And we'll address more of the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 25
law and the like after we get the chance to talk to the
Bracamontes. Thank you.
JUDGE TAY: Thank you, Mr. Hofsdal.
Appellants will now have four-and-a-half hours
for their presentation. Obviously, we will break in the
middle a couple of times, I think. Their presentation
will include the examination of witnesses. So before I
ask Appellants to begin their presentation, I'd like to
swear in both the witnesses.
So Mr. Juan and Mrs. Jacqueline Bracamonte, if
you could please just raise your right hand, and I'll
administrator the oath as witnesses.
JUAN PHILIP BRACAMONTE,
produced as a witness, and having been first duly sworn by
the Administrative Law Judge, was examined and testified
as follows:
JACQUELINE BRACAMONTE,
produced as a witness, and having been first duly sworn by
the Administrative Law Judge, was examined and testified
as follows:
JUDGE TAY: I see both heads nodding. Their
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 26
microphone is muted.
MR. BRACAMONTE: Yes.
MRS. BRACAMONTE: Yes.
JUDGE TAY: Thank you. I appreciate that.
Okay. Mr. Markow, please feel free to begin
whenever you are ready.
MR. MARKOW: Thank you, Your Honor. I appreciate
that.
We're going to proceed with the direct
examinations of the witnesses. I presume that the order
of business will be to have a direct exam of one witness
and the cross of that witness. The direct exam of the
second witness and the cross of that witness.
JUDGE TAY: This is Judge Tay. Yes, that would
be correct.
MR. MARKOW: Thank you, Your Honor. So with
that, we will ask Phil Bracamonte to testify first. And
again I apologize. I may need to repeat some things for
Phil, but I would also ask that the witnesses stop muting
their microphone, at least for this portion of the
hearing, so we can have a conversation.
JUDGE TAY: Mr. Markow, I'm sorry to interrupt.
Just for clarity's sake, when you refer to Phil
Bracamonte, that would be Juan Bracamonte; is that
correct?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 27
MR. MARKOW: It is. His legal name is Juan, but
everyone refers to him as Phil. And so --
JUDGE TAY: Okay.
MR. MARKOW: I know him as Phil.
JUDGE TAY: Thank you for clarifying that.
MR. MARKOW: So we've sworn them in, and I will
call them now, and we will get going.
DIRECT EXAMINATION
BY MR. MARKOW:
Q Phil how old are you?
MRS. BRACAMONTE: How old?
MR. MARKOW: We started with the first question
being a hearing issue, and I apologize again.
BY MR. MARKOW:
Q Phil could you hear me all right?
A Yes, I can hear you. Yes.
Q Can you tell us how old you are, please?
A What's that? Greg, I'm sorry. Repeat that.
Q How old are you, Phil?
A 72.
Q Are you wearing your hearing aids today, Phil?
A Yeah, no. I know. They are -- my hearing has
been declining over the last few years.
Q All right. We'll be patient and work with that.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 28
All right?
A Okay.
Q Phil, I understand you're a long-time San Diegan.
Tell me about your connections with San Diego, briefly?
A My parents moved to San Diego when I was four
months old and remained there pretty much all my life
until we moved in '08. And my father eventually started
an aviation business. We started in an airport in Del
Mar, California, in 1950. And in 1952 he had an
opportunity to relocate to Lindbergh Field, which is known
as San Diego International Airport today.
Q Phil, let, me slow you down a little bit 'cause
we want to find out a little bit about Jimsair and that
history too in a minute. But I'm a little -- I want to
know about you personally and your ties to San Diego and
California. Did you go to college in California?
A I did some college in San Diego. I went to San
Diego City School and San Diego State for a short period
of time. I graduated from Claremont High School. We
lived for most of my life in the Bay Park area in San
Diego, and I have a couple of brothers and a sister. My
parents are deceased.
Q And are they in San Diego as well?
A My sister is deceased. One brother is in Palm
Desert area, Cathedral City. And the other one, I
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 29
believe, is in San Diego. I don't have a relationship
with them.
Q And we've heard about a couple of adult children.
How many kids do you have?
A We -- we have three boys.
Q And where do they live.
A We have -- our oldest son relocated to Henderson
from San Diego two years ago. Our second son lives in
Hermosa Beach, California. And our youngest son moved to
Las Vegas in around June 2008.
Q And in 2008 where did he move from?
A Repeat that?
Q Where did he move from in June of 2008?
A Excuse me. He moved from Chico, California. He
finished school in Chico and graduated, then he moved to
Las Vegas.
Q In 2008 is it fair to say that all three of your
children lived in California?
A The young -- the middle boy was finishing up his
time in the Navy, and I believe he was up in Whidbey
Island, Washington.
Q In 2008 what was your title at Jimsair?
A President.
Q Did you also own Jimsair?
A Did I what again, please?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 30
Q In 2008, at least until July of 2008, did you
also own 100 percent of Jimsair?
A With my wife, yes.
Q How did you get involved with Jimsair?
A My father started the business on Lindbergh Field
San Diego international airport in 1952. And as the
business grew over the years, he gifted -- he restructured
the stock in the early 80s, and he gifted the stock to his
children. And up until that time I was -- I started at a
young age myself, probably going to work at the airport
when I was 12, and I obtained a work permit and would go
down on weekends to work with my dad for a number of
years. And over the years I was able to obtain my ratings
for aircraft to power plant, became a license for a
private pilot --
Q Hey, Phil, let me slow you down a little bit.
What kind of business is Jimsair?
A How did it start?
Q No. What's the business? What does it do?
A Oh, it's an aviation business. It started out as
repairing aircraft, servicing aircraft, generally aviation
aircraft. And over time the services expanded into a
flight school, flight training, aircraft rentals,
chartering, fuel sales, aircraft sales, and hangering of
aircraft, providing parking -- outside parking for
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 31
aircraft.
Q Did there come a -- was there a period of time
before 2008 where you basically ran Jimsair's business?
A I -- I ran the business up until the time my
oldest son joined the business and -- and he ended up
marrying a young lady that had worked for us for a number
of years and was running the -- working the accounting
department. And she eventually became the CFO. So I had
this, you know, two kids. I call her -- she's my
daughter-in-law, but she's one of the kids.
I was very fortunate that they turned out to be
pretty good managers. And so I gradually turned over the
business to my son and his wife, and they pretty much made
all the decisions. My son's wife handled all the
financial matters. She signed all the checks. I worked
my way out of those responsibilities. So for the last
five years of Jimsair's existence, my son John and his
wife Gina ran the business.
Q And so starting at about -- if I did my math
right -- starting in about 2003, John and Gina, your son
and daughter-in-law were the people who were doing the
day-to-day running of Jimsair?
A Yes.
Q Starting in 2003 what were your actual
responsibilities in terms of Jimsair operations?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 32
A The only thing I was -- in 2003 I was focused on
was trying to convince the airport authority to extend our
lease. We were -- our lease was due to expire on the
airport in 2012. And we had made some -- we started some
expansion prior to 2003. I -- I need to clarify something
about the -- the airport itself. The airport changed
government entities in 2003.
Prior to 2003, the government entity running the
airport was the Port of San Diego. Then in 2003 a
regional government body took over the airport, and it
became known as the San Diego Airport Authority. We
started some expansion prior to 2003 with the
understanding that our lease would be extended.
After 2003 --
Q What was your role in all of that?
A That -- my role was the -- I was the key person
that was dealing with the authorities and trying to
negotiate some extension of the lease.
Q Did you have an office in Jimsair while you were
doing this?
A I had a small office. We had a building that was
tucked behind a couple of hangers. And I -- I had a small
office away from the operation. It was on a second story
floor and did not have windows or anything. It was just
no reason for me to -- to be out in the middle of the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 33
operation. So I was sort of tucked in the -- a back
office building we had behind some hangers.
Q And how often would you go to the office to work?
A Just out of habit I would go to the office by
midtown pretty much every day for a while.
Q For how many hours a day would you go in when you
were in town?
A Oh, it could be half a day. It could be a couple
of hours.
Q And is that true all the way up until the sale of
Jimsair in July of 2008?
A Repeat that, please.
Q Was that true all the way until July of 2008 of
the sale of Jimsair?
A No. We were -- like I said, we were -- we were
traveling in 2008. The only thing I was trying to resolve
is that the issue with the Airport Authority eventually
turned into litigation. And then I had been trying to
resolve the litigation. I think it was pretty clear to me
that we were not going to get a lease extension. And
without the extension I stopped construction of our
improvements, probably about 2003.
Q My question is a little more narrower than that,
Phil. Try to understand in 2008, whenever you were in
town and whenever that was, how much time did you spend in
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 34
your office?
A I -- I -- not much, unless I was there to try to
resolve issues with the Airport Authority. Otherwise no,
I was not there much.
Q Now, moving away from Jimsair, there came a time
where you determined to move out of San Diego; correct?
A Yes.
Q When was that time that you started to consider a
move from San Diego?
A Oh, my wife started talking about it in 2007.
And being, you know, life-long residents of San Diego, I
think we got to the point that we were looking for some
new adventures and, you know, a different place to live.
And we started to focus on Las Vegas. We had always
traveled to Las Vegas. We probably made one or two trips
a year and had always enjoyed the city itself. And so we
were somewhat familiar with the city, primarily, the strip
and a little bit of the surrounding area.
Q Phil, let me slow you down a little bit. When
did you start to seriously consider Las Vegas as the
target for moving out of San Diego?
A 2007.
Q And why did you start looking at Las Vegas versus
any place else in the country?
A We wanted to be close to our Arizona home, and we
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 35
wanted to be close to Southern California. My wife's
parents still -- I should say my wife's, you know, my
wife's parents were still alive. We had one son in San
Diego. We didn't know it at the time, but our middle son
was going to relocate from Whidbey Island to Hermosa Beach
area. And that's primarily because it was sort of
centralized to Southern California and Lake Havasu.
Q When you start to focus on Las Vegas as a target
for a move in 2007, did you do some preliminary research
about moving there?
A Yes. Yes, we did.
Q What kind of preliminary research did you do?
A We, of course, used the internet to start looking
at homes in the Las Vegas and Henderson area. And one
thing that was happening at the time was a lot of
foreclosures in Las Vegas. And the real estate property
prices were -- seemed to be dropping substantially which,
you know, it got our attention. The weather was
acceptable to us in Las Vegas because it's similar to Lake
Havasu. So we were accustomed to the winters and the
summers. We also started to read about a lot of the
speculation going on in Las Vegas, and the opportunities
to buy houses that was either fore -- had already been
foreclosed or were going to foreclosure.
I was already somewhat familiar with the airport
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 36
itself. And the airport itself was substantially bigger
than San Diego, and I was also aware that it also offered
more destinations as an airport than we had out of San
Diego. A number --
Q Stop. Stop. So, Phil, we were discussing sort
of the -- sort of the progress of your decision to move.
I understand you said in 2007 you decided to leave San
Diego, and you started to focus on Las Vegas, that you did
some internet research. Did you do anything else in 2007
to help facilitate a move from San Diego to Las Vegas?
A It was primary all research between articles and
the internet.
Q And did there come a time before you actually
moved, but after you did some of this preliminary
research, where you decided this is a go? It's a green
light. We're going to do this.
A Yes. Yes. December 2007, we decided we're -- we
were going to move to Las Vegas. I keep saying Las Vegas
but it was actually -- our focus seemed -- initially
seemed to be Henderson.
Q Henderson is a suburb of Las Vegas; correct?
A Well, actually, Henderson is the second largest
city in Nevada.
Q So having made the decision in December of 2007
to leave San Diego and go to Las Vegas, what did you do to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 37
effectuate that decision? What did you do to actually
make that happen?
A Well, we had a setback. My wife's mother became
ill in late December 2007. She was admitted to a care
facility and -- which sort of delayed us from traveling up
to Henderson or doing much. And, unfortunately, it was
January -- I think it was January 21st or 23rd where my
wife's mother passed away.
Q And presumably the arrangements surrounding that
and the lead-up to that and the fallout from that
postponed your ability to effectuate your move; correct?
A Yes.
Q Now, there came a time where you were able to
actually start to effectuate that move; correct?
A Yes.
Q When was that?
A We -- it was February 24th where we left
Escondido.
Q And what did you do on February 24th to
effectuate the move from San Diego to Nevada?
A We drove up to Nevada with the intention of
finding an apartment.
Q And why did you want an apartment in Nevada?
A I think we found it on --
Q No. My question is not how did you find it. My
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 38
question is, why did you want to go rent an apartment in
Nevada?
A Oh, well, we needed a temporary place to live.
We didn't know how long it would take to buy a house. So
we thought the best situation for us would be renting an
apartment for awhile while we house hunted and found a
house.
Q And so what did you do to go find that apartment
in Nevada at the end of February 2008?
A We concentrated on the Green Valley area, which
is in Henderson. And there were some major arteries in
Henderson, about three major arteries. One was Stephanie.
The other one was Green Valley and Paseo Verde. And
between those three roads we -- we just basically drove up
and down and stopped at apartment complexes taking a look
to see what -- what they offered, what the features were,
and the rental.
Q Can you proximate how many apartments you looked
at before you decided on the one?
A No more than probably half a dozen.
Q And you eventually decided that one was
acceptable to you?
A Yes.
Q What kind of apartment was it?
A It was a -- it was on Stephanie and was probably
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 39
about four or five blocks from Interstate 215. It was a
single -- single -- we picked a unit on the first floor.
We didn't want to go up any stairs. A lot of these were
multiple level apartments. The other attraction is that
we have a washer and dryer inside a unit, rather than a
common laundry room. Our parking space was near the front
door. So it fit the bill.
Q I want you to turn if you will, I think that --
MR. MARKOW: And if anyone could confirm everyone
has the exhibits before them so I can refer to exhibits
and people will be able to see them. Is that true? I see
some heads nodding, which is good.
BY MR. MARKOW:
Q So if you could please turn to the tab that's
marked as 3?
A Yes.
Q Can you tell me what this document is that is
Exhibit 3?
A Yes. This -- it's just a summary. A summary of
the -- the rent, what was -- what was -- what was involved
in the rent, any prepayments, move in -- looks like move
in cost. And toward the top it has the phone numbers for
the utility companies. There's about four of them:
Nevada Power, Southwest Gas, Cox cable and Embarq.
Q If you take a look at the bottom, is that your
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 40
signature under "Resident Signature"?
A Yes. That's my signature.
Q And was this sort of a pre-lease document that
had been executed to rent that apartment in Nevada?
A Yes.
Q It notes that you've scheduled move in for 8:00
to 4:00 p.m. on March 1st. Do you see that? It's just
above the chart.
A Oh, yes. Yes, I see it. Yes.
Q And then the second page of Exhibit 3 are two
sales receipts. Do you see that?
A Yes.
Q And are these payments that you made for your
application fee and your rent?
A Yes.
Q And then if you turn to the fourth page, there's
a document entitled "Rental Agreement". Do you see?
A Yes.
Q And on the bottom are those the signatures of you
and Jacqueline?
A Yes.
Q And it's -- on the top line it's dated March 1st.
Do you see that?
A Yes.
Q Now, if you go a few more pages in, you'll see
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 41
another signature page at the very back dated March 6th.
Do you see that?
A Yes.
Q And do you remember when you started moving
possessions into that apartment?
A It may have been March 6th.
Q Did you empty your San Diego house out and move
everything into this apartment?
A No. No.
Q Why not?
A Well, first of all, the apartment -- the house in
San Diego was bigger than the apartment. So we only took
from San Diego what we needed to as far as bedding, a bed,
a nightstand, lamps, chairs, a table. We took linens, you
know, towels, some dishes with us. It was just -- it was
just temporary as far as we were concerned.
Q What do you mean by temporary?
A Well, we had only planned to remain in the
apartment until we found a house.
Q And what did you do after you rented the
apartment about finding a house?
A We -- we decided to -- because of foreclosures
were all the rage back then, we started looking at
foreclosed homes. And on a regular basis there was a --
seems like every weekend there were auctions up here on
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 42
homes. And we did a little research with the auction
site, and we decided to go ahead and try that. And we
registered to attend the auction. It required a $5,000
cash deposit to become a bidder. And we tried that route
initially. It didn't work for us because the -- there
were too many people bidding on these homes.
Q Okay. Turn to the tab that's Exhibit 4 that's in
front of you. Do you see that?
A Yes.
Q And you can see it's a printout of some kind;
correct?
A Yes.
Q And on the very bottom right-hand corner it has a
date of April 6, 2008. Do you see that?
A Yes.
Q Is it the date you printed it? Why does that
date show up there?
A I don't know. That must be a print date, but the
auction was in March.
Q And are these the confirmation of your attempt to
go to that auction and bid on a house?
A Yeah. If you -- if you look, we were -- I'm
looking at page 2, and it says, "Venue Information".
Q I see that.
A Yeah. And it looks like that was the date that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 43
we had paid for to attend.
Q And were you able to purchase a house at that
auction?
A We -- we made some bids, but we were not
successful.
Q And so what was the next thing you did to buy a
house in the Henderson area?
A We just continued -- when we were there, we just
continued looking around at homes, and we eventually
decided that there were too many -- too many foreclosed
homes out there. We -- we ended up retaining a broker.
His name was Jim Robertson.
Q And were you able, using the services of
Mr. Robinson -- Robertson rather, to find a home?
A Yes. We made a few offers, and I think it was
the fourth offer. It was its fourth house that we made an
offer on that we were successful, and that's the house
we're in now.
Q And you bought that in -- you closed on that in
September of 2008?
A Yes.
Q But you had been looking for it since March of
2008?
A Yes.
Q Now, when you were -- I want to go back to
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 44
February of 2008 and that end of February time frame when
you rented your -- when you rented your apartment. You
did a whole number of things that weekend regarding moving
to Nevada. Do you remember those things? That's a broad
question. We'll get into the specifics in a minute.
A Okay.
Q Do you remember doing stuff?
A Yes. In order -- yeah. We had to do some --
before we could rent the apartment, we had to do some
things. Like we had to have a local mailing -- a mailbox.
So we setup a mailbox. We --
Q Well, hang on now for a second. Phil, this is
not a memory test. I'm going to run through this stuff
with you. I just wanted to overall start to focus you on
those things. So hold on for a second. I don't have a
question for you quite yet. Okay. So you did just
mention obtaining a post office box. Did you go do that?
A Yes.
Q And have you historically been a user of post
office boxes?
A Yes.
Q And when you lived in San Diego did you use a
post office box?
A Yes.
Q And so you were replicating your mail experience
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 45
in Nevada from what you had been doing in California?
A Yes. Now --
Q And --
A Now, I'd like to clarify some -- even though
we're talking abOutpost office boxes, it was a private
mailbox in Henderson.
Q So what's the difference in your mind between
those two things?
A Well, this place was called Outpost, and it's
very similar to a UPS store. And when somebody mentions
PO Box, I always think of post office. Similar services.
Similar services.
Q Yeah. And do you remember when you did that?
A It was -- it would have been in late February.
Q And after obtained your post office box, did you
start to change your mailing address for things in your
life from California to Nevada?
A Yes.
Q What things did you immediately change from
California to Nevada upon obtaining your Nevada mailing
address?
A One would be the -- I lost you there. Hold on.
Q Let me repeat the question. All right. Can you
hear me now?
A Well, I lost the video. Hold on. Do you hear
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 46
me?
Q Yes.
A I don't have any video. I don't know where my
video went.
Q Phil, can you hear us?
A Well, yeah, I can hear. But I can't see anyone.
I lost the whole video. Let me see what's going on. I'm
sorry.
JUDGE TAY: Mr. Markow, this is Judge Tay.
MR. BRACAMONTE: Yeah. I'm sorry.
JUDGE TAY: Not a problem at all, Mr. Bracamonte.
This is Judge Tay. Maybe we can take a 5-minute,
maybe a 10-minute break right now to give everyone a
little bit of breather.
And, Mr. Bracamonte, feel free to log off and log
back on in those 10 minutes and hopefully your video will
be restored at that point.
So why don't we all take a 10-minute break.
We'll come back at 11:33.
(There is a pause in the proceedings.)
JUDGE TAY: I believe we're ready to continue and
to go back on the record.
Mr. Markow, are you prepared to continue?
MR. MARKOW: I am, Your Honor.
JUDGE TAY: Okay. Franchise Tax Board, are you
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 47
ready for us to continue also?
MR. HOFSDAL: Yes, I am.
JUDGE TAY: Great. Mr. Markow, please continue
whenever you're ready.
MR. MARKOW: Thank you, Your Honor.
Phil and Jacqueline, have you fixed your
technical issue?
MRS. BRACAMONTE: Yes, I believe we have.
MR. BRACAMONTE: Yeah.
MR. MARKOW: Thank you.
JUDGE TAY: This is Judge Tay. I think just for
ease for everyone, if Mrs. Jacqueline Bracamonte help in
making sure all the questions are heard, then that'll be
totally fine with us.
MRS. BRACAMONTE: Thank you very much.
MR. MARKOW: I'm glad you said that, Your Honor,
because I told her not to do that.
JUDGE TAY: I think that would help everyone. So
that would be totally allowed.
MRS. BRACAMONTE: I am his hearing --
MR. BRACAMONTE: Yeah.
MR. MARKOW: Thank you everybody.
BY MR. MARKOW:
Q Phil, before we took our break, we were talking
about your post office box in Henderson and things that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 48
you began to direct mail forward to that box. Remember we
were talking about that?
A Yes. Yes.
Q And the moment I asked that question your video
feed had a problem. So let me re-ask approximately the
same question which is: After you obtained your post
office box at the end of February 2008 in Henderson, what
mail did you start directing to that post office box as
opposed to your post office box in California?
A Well, there were a number of items. It would
have been bills, utility bills, insurance policies,
mortgage statements, vehicle registrations, stuff like
that.
Q Did there come a time where you abandoned your
California post office box?
A Yes.
Q I'm going to ask you to turn what's been marked
as Exhibit 7. And do you see that Exhibit 7 is a change
of address confirmation?
A Yes.
Q And is this the confirmation that you received
from the postal service that your California box was going
to no longer be your mailing address, but your new mailing
address was going to be in Henderson?
A Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 49
Q Why did you wait until July 23rd, 2008, to shut
down your California mailbox entirely?
A We had already, I think, moved most of the mail
over. So whatever was -- remained out there, we just had
a change of address confirmation.
Q Did you register to vote in Nevada at the end of
February 2008?
A We registered to vote in Nevada at the time we
obtained our driver's license. It was one of the -- one
of these automatic features where you get a driver's
license you register to vote.
Q And so you got a Nevada driver's license and
registered to vote at the same time at the end of
February 2008?
A Yes. Sounds right. Yes.
Q If you could turn to Exhibit 8, please.
A Yes.
Q Is Exhibit 8 the confirmation that -- or rather
the application that you made to the State of Nevada to
register to vote there?
A Yes.
Q And that's your signature on the first page of
Exhibit 8?
A Yes, it is.
Q And the second page is the same form for
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 50
Jacqueline?
A Yes.
Q Did you have a primary vehicle in February of
2008?
A Yes.
Q What kind of car was that?
A It was a Chevrolet Avalanche.
Q And did Jacqueline have her own car at that time?
A She had a company car that was registered to
Jimsair.
Q So she did not own a car. She was driving a
Jimsair leased car, but you owned a car at that time?
A Yes.
Q And did you register the car that you owned in
Nevada at the end of February 2008?
A Yes.
Q If you turn to Exhibit 9, please, is this a
receipt for that or is this a receipt for your driver's
license?
A This appears to be a driver's license.
Q And so it's also from the end of February 2008.
These are -- this is a receipt for your driver's license?
A Yes. Yes.
Q Excuse me for one second. You had several other
vehicles that you owned in February of 2008; correct?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 51
A Yes.
Q And you had a 1995 trailer. Is that a vehicle or
is that something you hitch onto a vehicle?
A A trailer. It sound like it was a trailer in
1995.
Q And what is a trailer, for those of us who are
less literate in the automotive world?
A We -- we had a flatbed trailer -- 18-foot flatbed
trailer that we used to haul off-road bikes and buggies
out to the desert.
Q And in what state was that trailer registered in
February of 2008?
A I don't -- I don't think we registered that in
February. It was registered a little later.
Q No. No. Okay. In January of 2008, in what state
was the trailer registered?
A California.
Q And did you eventually shift it out of California
to a different state?
A Yes. That trailer --
Q Actually, you registered that in Arizona?
A Yes.
Q And did you own a Dodge Ram?
A Yes.
Q And did you eventually register that in Arizona
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 52
too?
A Yes.
Q Why didn't you immediately rush out and register
those cars in Arizona in February of 2008?
A Why didn't we you say?
MRS. BRACAMONTE: Why didn't you register --
BY MR. MARKOW:
Q Yes. Why didn't you?
A Oh, well, I had -- the Ram was, if I remember
correctly, the license had expired. So it was just
sitting at the house in California in Escondido. The
trailer, I didn't want to haul it all the way to Las Vegas
just to register it. I took the opportunity -- when we
needed to use the trailer, I took some stuff up to
Arizona. And while I was there, I registered in Arizona.
So that's how the trailer got registered in Arizona.
Q So this is one of those things. These vehicles
started to get registered as it was convenient for you
whenever you were going back and forth to go re-register
them?
A Yes. It was more a convenience for us as we were
either in Nevada or Arizona.
Q And an electric cart of some kind?
MRS. BRACAMONTE: Yes, an electric cart.
MR. BRACAMONTE: Yes. Yes. That was registered
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 53
in Arizona, the gym cart.
BY MR. MARKOW:
Q And do you remember when that happened?
A I would have to go look at the records.
Q And you had three vehicles, at least to me look,
looked like they may be either dirt bikes or motorcycles.
It's a Yamaha XL 1200, a Yamaha FX Cruiser. Do you know
what those are?
A Yes. Yeah, dirt bikes.
Q And had they been registered in California?
A Yeah, they were. Yes.
Q And did you eventually register them someplace
else?
A Eventually, yes. Or we gave them -- I
necessarily didn't register them. We just gave them to
the kids, and they -- they eventually registered them.
Q Take a look at Exhibit 10. This is a document
from AT&T. Do you see that?
A Yes.
Q What is Exhibit 10?
A That is a -- looks like a --
Q Phil, you're talking, but I can't hear you.
MR. MARKOW: Could other people hear?
MR. BRACAMONTE: Yeah, it looks like it's an
invoice for a cell service in Nevada.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 54
MR. MARKOW: Phil, I'm having some trouble, so
excuse me.
Can someone talk so I can see if I can hear?
JUDGE TAY: Mr. Markow, this is Judge Tay. Can
you hear us at all?
MR. BRACAMONTE: I can hear everyone.
MR. MARKOW: Yup, turning it off and on worked
fine. Sorry about that.
JUDGE TAY: Mr. Markow, you can hear us?
MR. MARKOW: I can now hear you, yes.
JUDGE TAY: Great. All right. Please proceed
whenever you're ready.
BY MR. MARKOW:
Q We were talking about -- and, again, I apologize.
We were talking about Exhibit 10, and I had asked you what
that was. And then I -- apparently, everyone else could
hear your answer, but I could not. So could you do me a
favor and repeat that, please?
A Yes. It looks like it's and an agreement -- a
service agreement for a cell service with AT&T.
Q And was this for -- was this the agreement
whereby you obtained a mobile phone with a -- with an area
code local to Henderson, Nevada?
A Yes.
Q And when did you do that?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 55
A This here is February 27, 2008.
Q And did you obtain a mobile phone on that date
with a Nevada phone number?
A Yes.
Q And did Jacqueline as well?
A Yes.
Q I'd like you to turn to Exhibit 11, please.
MR. MARKOW: Did we just lose Judge Tay?
MR. BRACAMONTE: This is opening an account at
Wells Fargo.
MRS. BRACAMONTE: Wait. We lost the judge.
MR. MARKOW: Hang on for one second?
MR. BRACAMONTE: Okay.
MR. MARKOW: I'm just waiting because I can't see
Judge Tay.
JUDGE JOHNSON: This is judge Johnson.
MR. MARKOW: These are the perils of the zoom
hearings. Is it just me?
JUDGE JOHNSON: This is Judge Johnson. I think
we lost his video for a second. I'm checking with him to
get him back.
MR. MARKOW: Okay. Thank you, Judge Johnson.
These are the perils of the Zoom hearings.
JUDGE JOHNSON: This is Judge Johnson again. Not
as a quick of a fix as I thought it might be. Let's take
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 56
a quick five-minute break, and we'll get everybody back
again.
MR. MARKOW: So that's 11:53, Your Honor?
JUDGE TAY: That's correct, yes.
MR. MARKOW: Okay. Thank you.
(There is a pause in the proceedings.)
JUDGE TAY: My apologies for the interruption. I
believe we're ready to continue. So please feel free to
continue wherever you left off.
MR. MARKOW: Okay. Thank you, Your Honor.
BY MR. MARKOW:
Q I believe we had just finished looking at
Exhibit 10, which were the cell phone receipts from the
end of February 2008, and I was about to turn to
Exhibit 11. So if we can turn to Exhibit 11, please.
It's a consumer account application from Wells Fargo. Do
you see that, Phil?
A Yes, I do.
Q What is this?
A This is an account. This is an application to
open a checking account and a savings account at Wells
Fargo.
Q What was your reason for opening a consumer
account at Wells Fargo February 27th, 2008?
A It's for the purpose of establishing a banking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 57
relationship in Nevada.
Q Did you have accounts in California at the time?
A Yes.
Q What accounts did you have in California at the
time for your banking relationship?
A We had a couple of accounts at credit unions and
another, I think, was a savings at Wells Fargo.
Q And what was your intention regarding continuing
to use those California accounts after you opened these
Nevada accounts?
A Well, eventually, we would phase out the
California accounts. That was the -- our intention.
Q And did you do so?
A Yes.
Q Do you remember when you closed your California
bank accounts?
A Not off the bat, no.
Q If you take a look at Exhibit 11, I see that it
list your mailing address on Stephanie Street. Is that
the post office box you told us about?
A Yes.
Q Why did you not list your California address on
this application?
A We --we -- well, as far as we were concerned, we
moved to Nevada. So this was our new address.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 58
Q Let's turn to Exhibit 12. I had asked earlier
about you registering your Avalanche in Nevada. Do you
remember that?
A Yes.
Q And Exhibit 12 is a series of different paperwork
regarding your Avalanche; correct?
A Yes.
Q What is this first page of Exhibit 12?
A This looks like an emissions test -- vehicle
emissions test for the Avalanche.
Q And that's dated on March 6th, 2008?
A Yes.
Q And was this part of the process of getting that
Avalanche registered as a Nevada vehicle?
A Yes. In Nevada it is very similar to California.
It requires a smog test.
Q And if you take a look at the second page, a
vehicle inspection certificate also dated March 6th.
What's that?
A When you -- yes. That's a DMV inspection on the
vehicle itself.
Q Turn to the third page. What's that?
A Insurance -- insurance coverage for the
Avalanche.
Q And this is from Farmers Insurance Company?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 59
A Yes.
Q I see in the upper left-hand corner -- first of
all, in the upper right-hand corner it's dated March 6th?
A What was that again?
MRS. BRACAMONTE: It was dated March 6th.
MR. BRACAMONTE: Yes, I see that.
BY MR. MARKOW:
Q And I see it expires on September 6th. Why was
it so short?
A It's a six-month policy.
Q And I see it lists your Henderson, Nevada
address. Do you see that?
A Yes.
Q If you take a look at the -- there's a page --
several pages further in of Exhibit 12. It's dated --
it's a fax sheet that's dated on the top of the fax of the
4th of March 2008 with some handwriting on it. Do you see
that?
A Yes.
Q "Please Remove", do you see that?
A Yes, I do see that. I see that.
Q Whose handwriting is that?
A Looks like it's just some transfer of a policy.
I, you know -
MRS. BRACAMONTE: Neither one of those.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 60
MR. BRACAMONTE: No.
MR. MARKOW:
Q And if you go to the -- if you go two more pages,
there's a State of Nevada Department of Motor Vehicles
receipt dated May 19th, 2008. Do you see that?
A Yes.
Q What is that?
A It looks like the date I registered the vehicle.
Q Do you remember why it took a couple of months to
get the Avalanche registered from the 6th of March, when
you started the process, to the middle of May?
A Yeah, I don't recall why.
Q There's a couple of receipts at the back for
Jiffy Lube. Do you see that?
A Yes.
Q I'll confess that my printout is so illegible I
couldn't tell you what these were for. Do you know what
these were for?
A Oil change.
MRS. BRACAMONTE: It's a reference. There's
service on the car.
MR. BRACAMONTE: Yeah. Service on the Avalanche,
oil change.
BY MR. MARKOW:
Q And where did that service occur?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 61
A Looks like there's a Jiffy Lube right there on
Stephanie Street. 130 South Stephanie Street in
Henderson.
Q And when was that? I'm sorry. If you gave an
answer, I did not hear. Do you know when that service
occurred?
A Yes. The vehicle was service at a Jiffy Lube on
Stephanie Street in Henderson.
MRS. BRACAMONTE: What was the date?
MR. BRACAMONTE: Oh, the date. The date is 3/21,
March 21st, 2008.
MR. MARKOW:
Q I'd like you to turn to Exhibit 16, please. Are
you with me?
A Yeah.
Q Exhibit 16, it looks like it's a scheduled
appointment for Eye Care Associates. Do you see that?
A Yes, I see it.
Q What is this?
A This is -- I went in for an eye exam. I needed
to update my glasses.
Q And were you -- and that was in -- what time
period was that?
A It's Eye Care Associates of Nevada.
Q No. When was that, Phil?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 62
A When was that. I'm sorry. It looks like April.
I don't know why I'm looking at this. It looks like
April 4th.
Q It's going to be your appointment, correct. But
presumably this was at some point before the 4th of April?
A Well, I see there's two different dates here. I
see -- on the second page, I see March 6th.
Q Well, what is the second page of Exhibit 16?
A Yeah. It says March 6th.
Q No. What is that document?
A Request for a consultation with the eye doctor.
MRS. BRACAMONTE: It's for glaucoma.
MR. BRACAMONTE: Oh, that's the -- yeah. That's
the report there, yeah, for the evaluation.
BY MR. MARKOW:
Q And then the last page of that document is
something from Doctor Cynthia Kiernan & Associates on
the -- on the -- do you see that?
A Yes.
Q And it seems to have checked a "Comprehensive
Examine of a Refraction". Do you see that?
A Okay. Yes.
Q And did you have this eye exam and medical work
done at the beginning of March 2008 in Nevada?
A Yes. Yes. That's the date on the documentation.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 63
Q Why didn't you go to California for that work?
A Because we wanted to -- as far as we're
concerned, we were living in Nevada, and this -- we were
ready to start, you know, looking for medical providers.
Q And there came a time where you shifted your
primary care physician from California to Nevada, did
there not?
A Yes.
Q When was that?
A I don't recall the date.
Q Was it in the year 2008?
A Yes, 2008.
Q And did you do it immediately in February of 2008
when you rented your apartment or sometime thereafter?
A It was after we had our house.
Q Why didn't you do it immediately?
A We didn't want to -- we didn't want to nail down
doctors to that extent until we knew where we were going
to live so that we would look for medical providers near
the house.
Q But, eventually, you did transfer your primary
physical care from California to Nevada shortly after you
had a permanent house in Nevada?
A Yes. We started that process, yes. But now we
knew what area we were living in.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 64
Q I want to shift topics a little bit. I want to
talk about the sale of Jimsair. There came a time where
you started a process to sell your Jimsair business;
correct?
A Yes.
Q When did that process begin?
A Well, that process began in May 2008.
Q What happened in May 2008 that lead to the sale
of Jimsair?
A I was having a conversation with our fuel
supplier, and I had mentioned that I was going to put the
business up for sale.
Q When did you determine to put the business up for
sale?
A When I mentioned to my fuel supplier that we -- I
was going to put it up for sale, he asked me if he -- he
said he knew of this firm in Texas, Landmark Aviation,
that was looking to expand, and they had been aggressively
expanding. And he asked me for permission to make contact
with them.
Q Before you had this conversation with your
supplier in May of 2008, did you know about Landmark?
A Well, I knew of the chain, but I didn't know much
about Landmark itself or the management.
Q Before May of 2008, had anyone expressed an
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 65
actual interest in purchasing Jimsair?
A No. No. It had been maybe several years prior
but nothing recent.
Q And so after you talked to this person in May
of 2008, how did you hook up with Landmark?
A The president of Valley Oil made contact with
Landmark and within, I think, a few days, the president of
Landmark gave me a call, and a meeting was scheduled in
San Diego probably within a week. The management flew
out. I think it was the president, vice president, and
in-house counsel. They flew out to San Diego, and from
there I gave them a tour of the facilities. We talked for
a while, and we went to dinner. At that night at dinner I
had already put what I thought I wanted for the business,
a term sheet. They -- we discussed it, and the following
morning they accepted it.
Q And so starting in May until July, it took that
long to document the deal?
A Yes.
Q Was the deal finalized on July 18th, 2008?
A I believe that was the closing date, yes.
Q Where were you living at that time?
A Henderson.
Q You got -- you received funds from that closing,
did you not?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 66
A Yes.
Q Where were those funds sent?
A They were sent to the Wells Fargo account that we
had opened.
Q The one you opened in February?
A Yes.
Q In Nevada?
A Yes.
Q When you went to Nevada at the end of February
2008, did you know you were going to be selling your
business?
A No. No. I had some obstacles that prevented me
from selling the business, and it was the litigation with
the Airport Authority.
Q Now, I want to turn a little bit to your
activities after February of 2008, you know, starting in
March of 2008 and through sort of the end of the year.
Did you return to California during that time?
A Yes.
Q You saw the chart that counsel for the Franchise
Tax Board put up in his opening statement today; correct?
A Yes, I saw that.
Q And through the days that he has marked as you
being in California approximate what you understand to be
you're time in California during the time after you move
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 67
to Nevada?
A Repeat that, please.
Q Was the chart he showed relatively accurate in
terms of the number of days you spent in California after
the first of March?
A It appears so, yes.
Q What were you doing in California for all that
time after you moved to Nevada?
A Well, we had -- we had a lot of things to wrap up
on a personal level and a business level. And my wife
Jacquie, one of the things that was important to her, she
had to get her father squared away after her mother passed
away in January. His health was going down, and she --
she needed to help him with doctor appointments,
medications. She eventually arranged for him to have
Meals on Wheels. My wife wanted to take care of her
mother's personal belongings from her father's house.
We -- we visited our son in Chico. We wanted to
continue visiting our son in San Diego and the grandkids.
And I think we did some babysitting so that our oldest son
and his wife could travel. I did meet with the Mexican
counsel on some litigation that was taking place in
Mexico. I also spent time to resolve the litigation with
the San Diego Airport Authority.
And some of those days in California was packing
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 68
stuff up that we brought with us as we drove back and
forth. So there was a variety of reasons that we -- we
went -- we were in California.
Q Today do you often visit California?
A Today what?
MRS. BRACAMONTE: Do we often visit California
today.
MR. MARKOW: Today.
MR. BRACAMONTE: No, no.
MR. MARKOW:
Q Can you state the date that you consider you
moved from California to Nevada?
A I consider the date late February when we
obtained the apartment and the driver's licenses and
registered to vote.
MR. BRACAMONTE: All right. Thank you, Phil. I
don't have any more questions for you right now, and I'll
turn you over to counsel for the FTB, who I'm sure has
some questions for you.
JUDGE TAY: This is Judge Tay. Yes, I'd like to,
if that concludes your examination of Bracamonte, I would
like to open it up to Franchise Tax Board to cross-examine
Mr. Bracamonte.
Mr. Hofsdal, please proceed whenever you're
ready.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 69
MR. HOFSDAL: Yeah.
CROSS-EXAMINATION
BY MR. HOFSDAL:
Q Mr. Bracamonte, can you hear me okay?
A Yes, I can.
Q Okay. Great. In preparation for meeting us
today, did you do anything to refresh your memory?
A Well, I have this binder with all the exhibits,
and I reviewed a, I guess, a declaration --
Q Okay.
A -- that I completed in -- it looks like I signed
in December 17th.
Q Did you discuss any facts with your wife about
what happened in 2008?
A We went over the -- yes, all the exhibits
together.
Q All right. Now, you said you had your
declaration in front of you; true?
A Yes, I have it. Yes.
Q Okay. And did you review that prior to speaking
with us today?
A Yes, I read it. Yes.
Q Okay. After you read it and before we start
talking about your declaration, is there any -- any
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 70
changes to that declaration that you would like to make?
A I'm just going through it really quick.
Q Okay. Yeah. No, no. Take your time. And as we
talk about your declaration, if part of our conversation
elicits you to maybe think that maybe something is
inaccurate, you could go ahead and let us know as well.
We just want to make sure that we're all on the same page
with all these facts. All right?
A Yeah, it looks all to be in order.
Q All right. Normally, this is not an issue, but I
heard a couple of beeps there in the background. Are you
running a concurrent program like Skype or something like
that so you can communicate with your attorneys during
this testimony?
MRS. BRACAMONTE: No.
MR. BRACAMONTE: No.
MR. HOFSDAL:
Q No. Okay. Just making sure. Okay. And today
I'm going to ask you some questions related to your
declaration and various exhibits that we've already marked
as Appellants -- that's you -- the Appellants 1 to 18 and
Respondents -- that's us -- the FTB's A to BB. And you've
already indicated that you have all the exhibits and the
declaration in front of you right now; true?
A Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 71
Q And just as a suggestion you may want to pull
Exhibit F out and your declaration, because we'll be
referring to those quite a bit. And your declaration
probably more so than -- than --
A Okay. F as in Frank; right?
Q Right. Okay. Now, the first thing I want you to
look at is Exhibit D.
MRS. BRACAMONTE: Okay. Yeah. Then you can look
at Exhibit D.
MR. HOFSDAL: Yeah.
MRS. BRACAMONTE: Exhibit D.
BY MR. HOFSDAL:
Q Specifically, line 3 of Exhibit D. I'll wait for
you to get there.
A Okay.
Q All right. In your California tax return for the
2008 tax year, it looks like you've indicated that you
became a non-resident on January 1st, 2008. Do you see
that?
A Yeah, I can see that.
Q Now you seem to be indicating and that you
believe you became a non-resident sometime towards the end
of February; true?
A Yes.
Q Okay. Is there anything you could recall that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 72
changed your opinion as to when you filed your tax return
and -- and you giving us that opinion today?
MRS. BRACAMONTE: Look at the tax return.
MR. BRACAMONTE: No there's nothing. Repeat that
question again, please.
MR. HOFSDAL:
Q Sure. Sure, sure, sure. There's just a
discrepancy. There's a discrepancy between the position
in --
A Yeah, the two --
Q -- on your tax return. And you understand when
you sign your tax return under penalty of perjury; true?
A Yes.
Q Okay. And so there seems to be a discrepancy
between your position on the return and in fact you took
that same position in your opening brief that you became a
non-resident on January 1st. And today you seem to be
indicating that you became a non-resident sometime at the
end of February. And I'm asking you, did anything happen
over the course of last year or beyond to make you change
your opinion as to when you became a non-resident?
A Well, I think the date on the -- that's reflected
on Exhibit D was -- looks probably something that was
automatically put in by my accountant when he did the tax
return.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 73
Q Yeah. And I'm going to remind you that in that
position that you took and when you filed your original
opening brief was that you become a non-resident on
January 1st, 2008. And before that brief was filed, did
you have a chance to review that brief?
MRS. BRACAMONTE: No. I don't think it's -- it
would had -- ask him.
MR. HOFSDAL:
Q I don't think the brief is in exhibit, but I'm
just -- I think that the briefs that Respondent filed, and
you filed, you know, are not part of the exhibit binder.
MR. HOFSDAL: Judge Tay; is that correct?
MR. BRACAMONTE: I'm not familiar with --
JUDGE TAY: This is Judge Tay. That's correct.
The briefs are not part of the exhibits or the hearing
binder. So yeah, that's correct.
MR. HOFSDAL: Oh, okay.
BY MR. HOFSDAL:
Q So, Mr. Bracamonte, what I'm representing to you
is that there was a representation made in your opening
brief that you became a non-resident on January 1st, 2008.
And I'm asking you if, before you're attorneys filed that
brief, did you have a chance to review that brief?
A Okay. Will you please tell me where my opening
brief is that I said January?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 74
Q Yeah. Yeah, yeah, yeah, yeah. Yeah. It's not
part of the record. I'm just asking you in general.
A Oh, I'd like to look at the document.
Q Yeah, yeah. And you're aware you filed an
opening brief; true? In this case?
A Okay. I can't recall it right now.
Q Okay. Okay. So you don't recall -- and you
don't recall as you sit here today that you reviewed any
of the briefs prepared by your attorneys; is that what
you're saying?
A I only went through everything in the exhibit
book that was presented to us. And then the affidavit --
Q Yeah.
A -- my affidavit was a separate download.
Q Right. Yeah. And I'm not suggesting you may
have reviewed those in anticipation of today's testimony.
What I'm asking is, you know, on or about
February 26th, 2016, when your attorneys filed that
opening brief, did you review that brief prior to your
attorneys filing it?
A I -- I believe I did.
Q Yeah. Okay. And do you recall that, in that
brief that you reviewed, that you had indicated that you
became a California non-resident on January 1st, 2008?
And if you don't have a recollection that's fine. I'm
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 75
just --
A Yeah, yeah. I'd have to look at the document.
Q Okay. Fair enough. Okay. As I suggested
earlier, for the most part I'm going to go ahead and
follow your affidavit in regard to the numbers of the
affidavit. But because I think it's such a relevant issue
here, one of the first things I want to talk about is your
physical presence. And then we'll go ahead, and we'll
talk about your declaration. Is that okay?
A Sure.
Q Okay. In paragraph 19 of your declaration, if
you can go ahead and look at paragraph 19?
A Yes.
Q Okay. And go ahead and -- and did you review the
paragraph?
MRS. BRACAMONTE: Paragraph 19.
MR. BRACAMONTE: Yeah, I see it.
MR. HOFSDAL:
Q Yeah. Just go ahead and take a look at paragraph
19.
A I'm -- I'm looking at line. You want me to go to
19. I'm sorry.
Q It's okay. I'm sorry. It's my fault.
A Yes, I see that. We --
Q Okay. And the language I want you to focus on is
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 76
where you say in the first line in, "May 2008, after we
had already been living in Nevada for over three months."
Do you see that language?
A Yes.
Q Okay. Now, I want you to look at Exhibit F. I
know this is going to get complicated. Look at Exhibit F.
A Okay.
Q Okay. Isn't it true, based on your declaration,
that in the month of January -- and you spent 24 days in
California and no days in Nevada? Do you agree with that?
A Yes.
Q And then in February you say, based on your
exhibit at Exhibit F, that you spent 20 days in California
and 3 days in Nevada, true? Take your time.
A Okay. I see where you're -- yes. Yes, I see
here.
Q Yeah. So you agree that in the month of February
you spent 20 days in California and three days in Nevada;
true?
A Yes. That's what it indicates.
Q Okay. Yeah. And then in March in looking at
Exhibit F, and you indicate for the month of March you
spent 22 days in California, 7 days in Nevada, and 2 days
in Arizona. Is that in accord with your understanding?
A Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 77
Q Okay. And then in the month of April it
indicates you spent 21 days in California -- and we're
talking nights. I think you put it in terms of nights,
like, when you go to bed or spend the night. But in April
you spent 21 nights in California, 6 nights in Nevada, and
zero nights in Arizona. Is that basically your
understanding, sir?
A That's what it says.
Q Okay. Then it's my understanding from Exhibit F
that you didn't spend any days. Not a single day in the
month of May or a single night in the month of May in
Nevada; is that -- is that true?
A That's what it appears to be. Yes.
Q Okay. So in total, up until the month of May,
isn't it true that you spent a grand total of 85 days in
California and only 16 days in Nevada?
A If that's what it adds up to, yes.
Q Yeah. And isn't it true that you essentially
spent five times as many days in California as you did in
Nevada up until May 2008?
A Yes. But I believe I went over the reasons why
we were in California.
Q Yeah. I understand that. I'm just looking at
the -- I'm just -- we're just talking about days in
California and days out of Nevada at this point.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 78
A Okay.
Q And now I want you to look at Exhibit 26, and go
ahead and read that and let me know when you're -- no.
I'm sorry. I'm sorry. My mistake. You're declaration,
paragraph 26. I'm sorry.
A Yes.
Q Okay. And you say in paragraph 26 that you spent
a total of 149 days in California during the 2008 tax
year; is that --
A Yes.
Q Okay. And so isn't it true that of those 149
days, that 133 of those days were spent in California
prior to the sale of Jimsair?
A That sounds about right.
Q Okay. And during the same time frame, from
January 1st to the sale of Jimsair on July 18th, isn't it
true, based on your Exhibit F, that you only spent28 days
in Nevada?
A From what dates again?
Q From January 1st, 2008, through the sale of
Jimsair on July 18th. Isn't it true you only spent 28
nights in Nevada?
A If that's what it adds up to.
Q Yeah. Okay. Now, also in paragraph 26 you say
that you spent 97 days in Nevada during the 2008 tax year.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 79
And do you see that?
A Yes.
Q Excuse me paragraph 27.
A 27. 27. Yes, I see that.
Q Okay. Now, go back to Exhibit F. Isn't it true
that from September 29th, the date you essentially moved
into to that Henderson, Nevada home to December 31st of
that tax year -- and this is after you sold Jimsair and
started to occupy the Nevada home -- that you spent 63 of
those 97 days?
A Spent how many again, please?
Q 63 of the 97 days you say you spent in Nevada
during the 2008 tax year, that 63 of those days were from
September 29th to December 31st?
A Okay. Within -- well, I'll take you at your word
at it. I don't -- I don't remember that.
Q You have no reason to dispute what I'm saying
based on your Exhibit F; is that true?
A Okay. Yes.
Q And now I'm going to shift a little bit to just
the declaration itself. We'll kind of start at the
beginning and work our way forward. And if at any time
you need to take a break or you need to get fresh air or
water or go to the bathroom or whatever, just let me know
and we'll talk to Judge Tay about that. All right?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 80
I want to start with paragraph 2. And just to
make it easier for all of us, in paragraph 2 in the last
line it says, "Jacqueline and I each stopped receiving our
salaries from Jimsair on or around February 29th, 2008."
Do you see that.
A Yes.
Q Okay. Now, the question I have is -- I went
back, and I traced all of your deposits. It's my
understanding that both you and your wife had your W-2
earnings from Jimsair direct deposited into California
bank accounts; true?
A Yes.
Q Okay.
A Yeah.
Q Yeah. Now, I want you to look at Exhibit Z --
Exhibit Z. And the second page of the Exhibit Z, do you
see about that about three entries down for January 4th it
has a direct deposit right there from Jimsair for
$5,575.03. Do you see that, sir?
A Yes, I see it.
Q Okay. Now, I went through all of your records,
and I found four such deposits into your bank account
through the end of February. Okay. And if you want to
look at them, you can. They're at Exhibit Z-2,
Exhibit Z-4 -- if I'm going to fast let me know -- Exhibit
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 81
Z-10, and Exhibit 14. Okay. When I add up all of your
direct deposits through February 29th, I get a total of
$24,513. Do you have any reason to dispute that, sir?
A Okay. Yup.
Q Okay. Now, I want you to look at Exhibit H?
MR. BRACAMONTE: Which one, did he --
MRS. BRACAMONTE: H, honey.
MR. BRACAMONTE: H. Okay.
BY MR. MARKOW:
Q Exhibit H is your W-2?
A Yes.
Q Okay. You see under wages that indicates
$148,150?
A Yes.
Q Okay. So the question I have for you is kind of
a very roundabout way to get there. But the question I
have for you is in your declaration -- and you say you
stopped receiving a salary at the end of February. If you
add up all your direct deposits from Jimsair through
February, there's only $24,513.
The question is, when did you receive the other
$123,627? Is it possible, sir, that perhaps you earned
W-2 income from Jimsair beyond the February 29th date that
you indicated in your declaration?
A I did some handwritten notes. For some reason it
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 82
shows my salary from Jimsair a little over $67,000 in
January and over $50,000 in February, but I don't -- I
don't see anything after that.
Q Okay. So the question I ask, is there a
possibility that you earned income, W-2 wages, from
Jimsair beyond the February 29th, 2008, date?
A I don't believe so.
Q Okay. And you have no explanation then for the
difference between the wages received between January and
February of $24,000 and your W-2 of close to $150,000?
A No, no. I would have to go through all the bank
accounts and try to figure -- understand that one.
Q Okay.
A Yeah.
Q And now we'll just go to paragraph 3 and just
take a moment and read paragraph 3 there for us. Okay,
sir.
A Paragraph 3. Yeah. Okay. Read it.
Q And now you say there that the time that you
didn't anticipate that you would be selling Jimsair, but
there was a very real understanding at that time, sir.
Isn't it true that your lease with the Airport Authority
would soon come to a close?
A We were a number of years -- yeah. We still had
a few years to go. Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 83
Q Right. But it was your understanding, based on
the documents that I read, that up until the sale -- and
you had a firm belief that -- that those leases would not
be extended; is that true?
A Yes. It was going to go on for an IFP.
Q Right. So you knew -- or you believed in
December of 2007 that your days with Jimsair was
essentially come to an end whether its sold or whether you
lose it in your lease; true?
A Something was going to happen. I didn't know
what.
Q Okay. Now, if you could take a moment and read
paragraph 4?
A Okay.
Q Okay. Now, it's my understanding that you were
in Argentina during the month of December 2007; true?
A Yeah, we were -- we were on a cruise. That's
where the cruise ended up. Yeah.
Q Now, were you made of -- were you made aware of
your mother-in-law's illness before or after the cruise in
December? You can help him. I have no -- we just want to
get the right answers.
A Sorry. We probably were aware, but yes.
Q You were aware of it. Okay. And then it says
here that while my wife and I had planned to finalize our
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 84
move from California to Nevada in July 2008, we did not
leave Escondido because we deemed it necessary to remain
and care for my mother-in-law? Do you see that in
paragraph 4, sir?
A Yes.
Q Okay. So isn't it true, in addition to going to
Argentina for a cruise, that in the month of January --
and you can look at Exhibit F -- you also went to Arizona
for a couple of days and Mexico for a couple of days? Do
you see that, sir?
A Hm-hm, yes.
Q Okay. And then in the last line it says, "That
we remain in California for a few weeks to attend her
funeral and to be with my father-in-law," et cetera, et
cetera. But isn't it true at the end of January through
the first part of February you were in Arizona again?
A We were where?
Q In Arizona?
A I have to look at the dates.
Q Yeah. You can look at Exhibit F.
A Yes.
Q Yes. All right. So just based on what I just
told you and we just brought out, is there anything you
would like to change with regards to paragraph 4?
A Yeah. I need to clarify there were some trips in
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 85
there.
Q Yeah. So it wasn't in necessary to remain in
Escondido, I guess, is the point I'm trying to make.
Would you agree with that?
A What was the point you were trying to make again,
please?
Q No, no. I mean, I think the point you're trying
to make in paragraph 4, and you can correct me if I'm
wrong, is that you're essentially trying to tell us that,
I would have moved in January but for my mother-in-law's
illness. That prevented us from going to Nevada. Is that
the intent of paragraph 4, sir?
A That's the intent.
Q Okay. But the reality is that during this time
that you are unable to go Nevada, you were able to go on a
cruise to Argentina. You were able to go to Arizona
twice, and you were able to go to Mexico. Is that true,
sir?
A Yes, in which in another document we disclosed
all of that.
Q Yeah. No, I understand that.
A Okay.
Q I'm just looking at the intent of your
declaration and the facts that support it. That's all.
A Yeah.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 86
Q Is that all right?
A Yeah. Yeah.
Q Now, when you were talking earlier, and you were
talking about your wife's brother -- and what medical
condition does your wife's brother have?
A No. I think you misunderstood.
Q Oh, okay.
A Her father.
Q Her father. Okay. Okay. Okay, okay, okay. So
there wasn't a brother issue. It was just -- and the
only -- and you had talked about when your attorney asked
you what were you doing during all these days in Nevada,
and you were talking about wrapping up things. And some
of those things, I thought you said, had to do with a
brother or somebody's brother?
A No. That was my father-in-law.
Q Okay.
A Okay. And at the time he was experiencing COPD.
Q Okay.
A And maybe that's what you heard.
Q Okay. I'm sorry.
A Yeah. But she had to -- my wife spent some time
with him to set him up with his doctor appointments,
medications, pay his bills. And I think she became a
signer on all of his accounts. So she could sign -- pay
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 87
his bills. And she set him up with Meals on Wheels.
Q Okay. Did your father-in-law ever move to Nevada
with you?
A No. He came with my wife on some trips.
Q On some trips. Okay. And did your father-in-law
suffer from COPD throughout the 2008 tax year?
A Did he -- yeah. Yes.
Q Yes. Okay.
A He wasn't at the point where he was on oxygen
yet.
Q Okay. Gotcha. And -- and was your wife
essentially a guardian ad litem for your father-in-law or
a power of attorney?
A Yes, she had power of attorney.
MRS. BRACAMONTE: No.
MR. BRACAMONTE: Oh, her brother -- my wife's
brother had the power of attorney.
MRS. BRACAMONTE: But I had other
responsibilities.
MR. BRACAMONTE: My wife had other
responsibilities because she was the closest child.
BY MR. HOFSDAL:
Q Hm-hm. I got you. Now, I want you to go ahead
and look at paragraph 6 of your declaration and go ahead
and take a moment to go ahead and review that.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 88
A Yes.
Q Okay. Now, I want you to look -- and you have
already taken, like, one -- and look at this exhibit. But
if you go ahead and look at Exhibit 3 again, please, sir.
Let me know when you're there, sir.
A Yeah. I read it. It's paragraph 6?
Q Right.
A Yeah.
Q Yeah. Now, it says there and you had a scheduled
appointment for move in from 8:00 to 4:00 on March 1st.
Did you schedule that at that apartment when you
essentially reserved the apartment back at the end of
February?
A Let me go back and look at that document.
Q Yeah. Take your time.
A I see that. Yup.
Q Now, when you signed this reservation for this
apartment in Henderson, Nevada, did you also arrange for
your move in for March 1st, 2008? Do you see where it
says, "We have scheduled your move in appointment for 8:00
to 4:00 p.m. on March 1st, 2008?
A Yes.
Q Okay. Why did you miss that appointment?
A We were -- we were in California.
Q You were in California. Okay. And do you recall
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 89
if you were doing anything specifically in California that
caused you to miss that reservation?
A Yeah. I don't think we were there for that
appointment.
Q Okay. All right. Now, isn't it true that you
actually signed the rental agreement to take possession of
that apartment on March 6, 2008?
A Yes.
Q Okay. And did you receive the keys to that
apartment on March 6, 2008?
A I think we received the keys prior to that. I
thought I saw something where we took the keys.
Q Yeah. I see -- and that's why I'm asking. If
you go to the 17th page of Exhibit 3, it says, "Gate Card
Agreement."
A I see some key cards there, yeah.
Q Yeah. But you needed a key card to ger into the
apartment complex; true?
A Yeah.
Q Okay. And the assumption I'm making, and I just
want you to verify is, since you missed your March
1st, 2008, appointment, that you more likely than not at
least got the gate cards and quite possibly the keys to
the apartment on March 6th. Would you agree with that,
sir?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 90
A Well, the gate card, for some reason, the date
that we signed for it is of March 1.
Q Yeah. Yeah. And what I'm suggesting to you
is -- and what I'm suggesting to you is because these were
all done in anticipation of your March 1st appointment, in
which you missed; and I think we agreed that you missed.
So I'm saying if they basically took this from whatever
file you had showed up and had you sign it.
So I guess the inference I'm trying to make is,
is that you more likely than not didn't receive the keys
to the apartment or the keys to actually enter the complex
until you signed the lease on March 6, 2008. Would you
agree with that?
A That's -- that's the day we signed the agreement
yes.
Q Okay. Now, isn't it true that you took
possession of the Nevada abode -- the Nevada apartment
approximately eight days after you registered to vote in
Nevada and obtained a Nevada driver's license?
A Yes. And I think we have indicated that.
Q Yeah. No, I'm just -- so this is my
understanding of the timeline, is that you check into a
hotel about February 5th; true?
A 25th.
Q Okay. The 25th. Yes, I'm sorry. Yeah.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 91
A 25th.
Q Yeah. And that you remained in that hotel for a
couple of days; true?
A Yes, while we're looking around for an apartment
and everything else and to get all of our affairs in
order.
Q And while you're in that apartment, that's when
you go the DMV and register to vote and get a driver's
license; true?
A Yes.
Q Yeah. And then you check out of the hotel on the
28th, I believe; true? And what day do you check out of
the hotel in Nevada? Do you recall?
A No.
Q Okay. Do you recall what hotel you stayed at in
Nevada?
A No.
Q Now, our records reflect that the apartment was
about 1,150 square feet. Is that your recollection?
A 1,306 square feet?
MRS. BRACAMONTE: 1,100.
Q 1,150.
A 1,150. Okay. Does it say that in the paperwork?
Q I think those are records that we got from, you
know, from just doing basic research on the apartment?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 92
A Okay. I don't remember what it was. It was a
one-bedroom apartment.
Q It was a one-bedroom apartment. Okay. That was
the next question I was going to ask. And then you rented
that for$895 a month; true?
A $915.
Q Well, I thought the rent was $895, and then you
had to pay, like -- like, you pay water or something?
A Well, hold on please.
JUDGE TAY: This is Judge Tay. Sorry to
interrupt. But, Mr. Hofsdal, it's about 1:00 o'clock --
MR. HOFSDAL: Okay.
JUDGE TAY: -- or actually, it's a little after
1:00 o'clock. I'd like to break for lunch --
MR. HOFSDAL: Sure.
JUDGE TAY: -- soon if -- maybe we can wait for
Mr. Bracamonte's answer here, and then after that break
for lunch. Is that okay?
MR. HOFSDAL: That's perfect.
JUDGE TAY: Okay.
MR. BRACAMONTE: Yeah, on the first page of the
rental agreement $915 a month, which is $895 plus another
$20 -- it looks like water -- excuse me -- yeah, water and
sewer.
MR. HOFSDAL: Okay. Great. All right.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 93
JUDGE TAY: Okay. Thank you. Well, we've made
it to a little past 1:00 so far. We'll take a 30-minute
lunch to come back at, let's say, 1:00 -- 1:30. Okay.
We'll return on the call.
So we'll go off the record.
(A lunch recess was taken.)
JUDGE TAY: Thank you. Sorry about that.
Mr. Hofsdal, please go ahead.
MR. HOFSDAL: Sure.
BY MR. HOFSDAL:
Q Mr. Bracamonte, can you hear me okay?
A Yes, I can.
Q Okay. Great. Great. Now, when we left off, we
were talking about in your apartment. One of the things
that went through all of your credit cards statements and
bank statements and the like, and I didn't see any charges
or invoices for any moving companies. Did you hire any
moving companies to help you move stuff from California to
your Nevada apartment?
A No, we didn't. We did our own moving.
Q Okay. And, basically, everything you took to the
Nevada apartment is what you could fit into your Chevy
Avalanche; is that true?
A Yes.
Q If you could look at Exhibit 3-11 page? It's
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 94
Exhibit 3, page 11.
MRS. BRACAMONTE: Exhibit 3, page 11.
MR. BRACAMONTE: I have it.
BY MR. HOFSDAL:
Q Okay. Great. It looks like from Exhibit 3,
page 11, that you and your wife were assigned one parking
space; is that true? Parking space 5.
A I'm looking at page 11. That's a water heater
agreement on -- in Exhibit 3.
Q Exhibit 3 and that's the Arroyo Grande packet.
And I thought it was page -- in the 11th it says,
"Automobile Registration."
A No. I'm just looking at the page numbers on the
bottom. But okay, I see that. It says page 6 on the
bottom?
Q Yeah. Oh, yeah. It does say page 6 on the
bottom. It gets confusing A's, letters, multiple letters.
A Okay.
Q But for our purposes it's the 11th page of
Exhibit 3, and that's the way I'll identify the documents.
A Yeah.
Q And -- okay. Now, it looks like you were
assigned just -- and your wife were assigned just one
parking space, parking space Number 225; is that true?
A Oh, yeah. I see it.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 95
Q Yeah. Is that your understanding?
A Yeah. What is the question?
Q That you and your wife were just assigned one
parking space?
A Yeah. If I recall, every apartment has one
assigned space, and there's open space parking.
Q Okay. And it's my understanding from the lease,
that you and your wife were allowed to park up to two
vehicles at any one time; is that correct?
A Yes. We registered two vehicles.
Q Right. Yeah. And looking at that page -- and
you registered both the Escalade and the Avalanche. Do
you see that?
A Yes.
Q Okay. And do you recall, when you moved into the
apartment on March 6th, did you arrive in the Escalade or
did you arrive in the Avalanche?
A Well, we probably -- we would have arrived in the
Avalanche because we would be carrying stuff with us.
Q And then right above the "Car One" description
was described as the Escalade. It says, "Registered owner
if different from above." Do you see that?
A Yeah.
Q Okay. And you had identified earlier that at
some point, I believe in 2008, that you and your wife had
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 96
taken over the Jimsair lease on that Escalade; true?
A Yes. Correct.
Q So when you moved into this apartment, were you
the registered owner of the Escalade or was Jimsair the
registered owner of the Escalade?
A Jimsair.
Q And is there a reason why you didn't put Jimsair
on that?
A The Escalade? Yes. It's a lease.
Q Yeah. No. I'm just looking at the automobile
with the registration just to see if -- if -- that the
registered owner was left blank. That's all. That's the
point I'm making. Yes?
A Oh, up above?
Q Yeah.
A Yeah. It didn't seem to be that important.
Q Okay. All right.
A It's just for an apartment. Yeah.
Q Okay. I got you. It's just for the apartment.
All right. Was there ever a time when both the Escalade
and the Avalanche was in Nevada at the same time?
A The Escalade was never registered in Nevada. I
don't think it was --
MRS. BRACAMONTE: Or the -- was there ever a time
they were both -- we had both cars there?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 97
MR. BRACAMONTE: Oh, both cars there. Sure. I'm
sure. Yes.
BY MR. HOFSDAL:
Q Yeah. Okay. And how frequently in 2008 did you
have both cars in Nevada?
A Oh, I wouldn't know that right now, you know.
Q Okay. So were there times when both you and your
wife drove from San Diego to Las Vegas in separate cars?
A Yeah. We probably left separate times or
something.
Q Okay. Fair enough. Now, did you have any other
vehicles in Nevada while you occupied the apartment, other
than the Escalade and the Avalanche? Perhaps the motor
home?
A No. I don't recall bringing any other vehicles
up there.
Q Just the --
A We might have used the Excursion with the trailer
or brought stuff up from -- yeah. We bought some
furniture down in Lake Havasu for the house here in
Henderson, and we kept a storage down there. We may have
used the -- we had an Excursion.
Q Okay.
A We may have used that to bring some of the
furniture up.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 98
MRS. BRACAMONTE: Not for the apartment.
MR. BRACAMONTE: But not for the apartment.
BY MR. HOFSDAL:
Q Not for the apartment. That's the question I
had. Now, I have questions about in your stays in hotels.
I looked at the different card transactions, and I noticed
that throughout the period -- and you had the lease on the
apartment -- you also stayed at hotels in Las Vegas; is
that true?
A My wife at different times would bring her father
up here and get him a hotel.
Q Okay. All right. Do you -- while you occupied
the apartment, do you ever recall being in the apartment
and your wife was not?
A Probably the other way around. Yeah, probably
the other way around.
Q The other way around. Okay. So there were times
when your wife was in the apartment in Nevada, and you
were not?
A She was, yeah. She was in town with her dad.
Q Okay. How frequently was your wife in town with
her dad and you were not, while you rented the apartment?
A I wouldn't -- I wouldn't know that right now.
Q Was it more than one time?
A Yeah. I don't know how many times.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 99
Q Okay. Okay. So you're not able to provide an
estimate, but do you believe it was more than once?
A No. No. Yeah.
Q Okay. All right.
A She passed away.
MRS. BRACAMONTE: Who passed?
MR. BRACAMONTE: He said mother-in-law.
MRS. BRACAMONTE: No, no, no. I mean, he said,
"You can't provide an estimate of how many times."
MR. BRACAMONTE: No. I said no.
BY MR. HOFSDAL:
Q So just so there's no confusion, I asked if you
are able to estimate how many times your spouse and your
father-in-law --
A Oh, father-in-law.
Q -- was in your Nevada apartment and you were not?
A Yeah. I wouldn't know.
Q You wouldn't know?
A Yeah. No recall.
Q Now, I want you to look at Exhibit 4. That's the
registration for the auction.
A Yes.
Q Okay. Now, it said that -- it says on the -- I
guess the "hello1bracamonte", that you put it there for
registering, "You have successfully signed up for a huge
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 100
two-day Las Vegas area foreclosure auction." So did you
attend the auction on both days?
A I think we did just one day.
Q Just one day. Okay.
A Do you recall? Okay. My wife seems to think it
was two days.
Q Two days. Okay. Yeah. Just so we're clear,
is -- your wife overheard the question and confirmed that
you attended both days of the auction; is that true?
A I don't recall right now, to be frank with you.
Q What's that? Okay. And you also said that there
was auctions every week or so in Las Vegas, but this is
the only auction you attended from the time you occupied
the apartment in March through your first offer or even
retaining the house broker; is that true?
A Yes, that's true.
Q Okay. Now, I looked over this document,
Exhibit 4, in pretty good detail, and I didn't see any
notice on there where you were required to provide a
$5,000 deposit or anything confirming that they actually
received a $5,000 deposit. So my question to you is, were
you provided any receipts or any documentation reflecting
the payment of and the receipt of $5,000?
A Yes. We -- we took a cashier's check out of
Wells Fargo there while we were in Henderson.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 101
Q Okay. And then you brought that $5,000 cashier's
check to --
A To the auction company here.
Q Okay. And the auction company received that
$5,000 check?
A Yes.
Q How was that $5,000 dispersed back to you after
the auction ended?
A I think it was just a reimbursement.
Q Okay. So did they give you a check or cash?
A Probably had to be a check.
Q A check. And do you recall how soon after the
close of the auction you received that check back from
Wells Fargo?
A No, I don't.
Q Okay. Was it the same day of the auction? So
you recall if it was the same day of the auction?
A I don't recall.
Q You don't recall?
A No.
Q Okay. Now, I'd like you to look at Exhibit BB-8.
A little Star Wars reference by accident, I guess.
MRS. BRACAMONTE: What is the exhibit again?
BY MR. HOFSDAL:
Q Exhibit BB, page 8.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 102
A BB.
Q We have it marked there, so it should be easy to
find.
A Yeah.
Q And the account we're looking at here ends in
1412, and that's your San Diego-based account; true?
A I'm not sure.
Q Okay. If you go back to B-1, the same account
ending in 1412 has activity dating back to December 2007.
Does that refresh your memory at all with whether or not
the same account in March was your San Diego-based Wells
Fargo account?
A I'm looking at -- well, I'm looking for the
previous exhibit that shows the Wells Fargo account that
we opened. Okay. That account is not one of the ones we
opened in Nevada.
Q Right. So would you agree with me that the page
we're looking at, BB-8, it reflects activity in your San
Diego-based account?
A Okay.
Q And then I'm looking at the entry on March 21st.
A Yes.
Q A withdrawal of $5,000?
A Yes.
Q And that's the withdrawal for the auction,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 103
allegedly?
A Yes, it appears to be.
Q Okay. So does that refresh your memory as to
whether or not you had withdrawn that money from San Diego
or from a Henderson, Nevada, Wells Fargo?
A Well, we withdrew it from this account, the 1412.
Q Okay. Okay. Fair enough. Now, I want you to go
to -- this is kind of towards the end -- BB-103?
A Yes.
Q Okay. Now, it's my understanding that this is
one of the new accounts you opened up in Las Vegas; true?
A Okay. Yes.
Q Yes. So it's my understanding that about this
time, March 21st, 2008, you're closing your Wells Fargo
bank in San Diego, and you're opening up a Wells Fargo
bank in Nevada; is that true?
A Yes.
Q Okay. So now I want you to look at the first
entry on that account -- or second entry on that account.
I'm sorry -- on BB-103.
A Yes.
Q And that shows an ATM deposit of $5,000 on
March 22nd. Do you see that?
A Hm-hm.
Q So you agree with me that's the 5 -- the same
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 104
$5,000 you took out of the bank the day before?
A Let's see the auction date. Well, it looks like
we were at the auction only one day.
Q Now, the auction is a two-day event that ends on
the 23rd; true?
A 22nd or something.
Q It ends on the 23rd. It's a two-day auction. It
starts on the 22nd. It runs through the 23rd; true?
A What exhibit was that again?
Q BB-103.
A According to this exhibit -- no, no, the auction.
Hold on.
Q Okay. It's your exhibit. It's Exhibit 4.
A Yup. It looks like one of the dates is the
March 21st.
Q Yeah.
A And then the second date is March 22.
Q Right.
A Okay.
Q You took money out of the bank on March 21st from
your old account in San Diego. And then you put a $5000
deposit the next day, which happens to be the first day of
a two-day auction back in an ATM on 3/22.
A Yeah, I recall now what it was. If -- if -- once
you register and you bid on a property and you succeed on
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 105
a property, you had to put an immediate $5,000 down. So
we didn't give money to the auction house. We kept it
with us.
Q So you didn't get a certified check like you
testified to?
A Well, now I thought. But now this refreshes my
memory where --
Q Okay.
A -- we had -- every bidder had to place $5,000
down, if you succeeded in bidding for a house at the
auction.
Q Okay. Okay. Fair enough. Now, on Exhibit 4 I
want to pay attention -- I want you to pay attention to
the date and the time that the confirming e-mail was sent.
Do you see that?
A Exhibit 4?
Q Yeah. Page 1, the first page of Exhibit 4.
A Okay. I don't -- I don't see the -- when the
e-mail was sent.
Q It says, "On the Date". It's about third of the
page down it has the date, and then it shows -- it has a
date, a time stamp of 20:30 and 14 seconds. Do you see
that, which is 8:30 p.m.?
A Yes.
Q Okay.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 106
A That's right after the date, right? Yeah.
Q Yeah. So now it looks like the -- it looks like
before you registered for the event you withdrew $5,000
cash from a San Diego-based bank account. Do you agree
with that?
A That's what it appear to be. Yes.
Q So then how did you know you would need a $5,000
deposit before you actually had registered for the event?
A It wasn't on the website.
Q So there's no possibility then, as far as you
recall, that all is what you were merely doing here, is
transferring $5,000 cash --
A No.
Q -- from the same account in San Diego you were
closing, to a Nevada bank account that you were opening
up?
A No. That wasn't the case.
Q All right.
A If anyone succeeded in a bid, they were required
to put $5,000 down.
Q Right. I also want you to look at Exhibit BB-8
again. Let me know when you're there.
MRS. BRACAMONTE: D? What is --
MR. BRACAMONTE: Which one?
MR. HOFSDAL: BB-8.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 107
MRS. BRACAMONTE: BB-8. Okay.
BY MR. HOFSDAL:
Q And the transaction after the withdrawal, it
shows that you had a purchase at a JC Penny store on
March 22nd -- that would be the day of the auction -- in
Lake Havasu City?
A Hm-hm.
Q So did the auction occur --
A Yeah.
Q -- the same day?
A We attended the auction.
Q Okay. Now, I want you to go ahead and look at --
and now in looking at your financial records you provided
to us, you know, just a summary of it, -- and you could
disagree with me if you'd like -- but it looks like on
your cards you kind of had some -- some high balances.
And there's a couple of penalties for not paying on time,
a couple of bounced checks, things like that. You had a,
you know, in litigation in Mexico when you were working
out a deal with your Mexican attorney in that lower the
cost and fees because of the financial pressure you were
under because of the litigation, not only in Mexico, but
the litigation with the city of San Diego.
So my question for you is, is that if you would
have prevailed in one of these auctions, what proceeds
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 108
would you have used to pay for that home? It's my
understanding of foreclosure auctions that cash is king.
You had to have cash to go ahead and pay that.
A Well, we had -- I had two choices. We either
finance it. The other thing is that the business had $2
million in cash in the bank.
Q Okay.
A So, you know, my wife and I as the owner of the
business, we had some flexibility.
Q Okay. So it was -- so at the time you went to
the auctions the possibilities were, as far as purchasing
a house, were either A, Jimsair was going to buy the
house?
A No, no. If A, finance it; B, if needed to, I'd
borrow the money from Jimsair.
Q So your -- and the question I have though, is my
understanding of foreclosure auctions is that cash is
king. That when you purchase a foreclosed home, you don't
have the option of taking even a day or two days or a week
or a month to finance that property. You have to pay cash
for that property I believe the same day; isn't it?
A No, no. There's actually people there that
provide financing at these auctions.
Q Okay. And did you make arrangements in advance
to go ahead and potentially get the approval to finance
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 109
one of these homes?
A No, because we didn't know what we may have, you
know, what we would end up with or even the price range.
Q Right. So the bottom line is, at the time you
went to this auction, you did not have the liquidity to
buy a home; is that true?
A Only through the business. Borrow through the
business, if you're asking me if we had to pay cash in a
short period of time.
Q Okay. Fair enough. Now, I want you to go ahead
and look at paragraph 8?
A Which one?
MRS. BRACAMONTE: Paragraph 8 --
MR. HOFSDAL: Paragraph 8 of your declaration.
MRS. BRACAMONTE: -- of your declaration.
MR. BRACAMONTE: Oh, my declaration. Okay. Yes.
BY MR. HOFSDAL:
Q Okay. Go ahead and read that, and let me know
when you're finish with it.
A Yes. Okay.
Q Okay. Now, we've already concluded, based on
Exhibit F, which is a document that you provided, that you
didn't spend a night in Nevada in the month of May. So is
it more likely than not that you had met with Mr. Robinson
in early June of 2008?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 110
A You know, right here it says May. We may have
met him in April.
Q April. Okay.
MR. BRACAMONTE: We hadn't met at the auction?
MRS. BRACAMONTE: No. When I was out looking at
open houses, I met him.
MR. BRACAMONTE: Okay. My wife met him when she
was out looking at open houses.
BY MR. HOFSDAL:
Q Great. All right. Now, isn't it true that when
you offered the house -- offered to buy the house that
you're now in, isn't it true that you purchased that home
with the proceeds from the Jimsair sale?
A Yes.
Q And prior to the sale of Jimsair, the only way
you would have been able to pay for a house would have
been from getting a loan from Jimsair. Is that what you
testified to earlier?
A If -- if it required the cash up front, yes.
That would have been the simplest for me.
Q Okay. Now, just go ahead and look at
Exhibit BB-94?
A 94?
Q Yeah. BB-94?
A Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 111
Q Okay. Now it looks like this was an account that
was opened in August 7th of 2008. Would you agree with
that?
A Yes.
Q So isn't it true that the proceeds from the
Jimsair sale, which looks like the tele transfer,
transaction VLO, wherever they may have been initially,
they eventually wound up in this new Wells Fargo account
that was opened up on August 7, 2008; is that true?
A I -- I don't know when this account was opened.
I don't know when this account was opened.
Q It just shows a beginning balance. It's the
first statement of that account that --
A I see. Yeah. I see, but I don't --
Q And it shows a beginning balance on 8/7 of zero
dollars?
MRS. BRACAMONTE: It's when we transferred down
from -- when we transferred.
MR. BRACAMONTE: Okay. Oh, okay. Yes. My wife
reminded me that they transferred us down to the -- to the
main branch on Howard Hughes Parkway.
BY MR. HOFSDAL:
Q Okay. So -- and the point I'm making is pretty
simple. It's just that the Jimsair proceeds eventually
wound up in a Las Vegas bank account that was opened on or
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 112
about August 7 of 2008. Would you agree?
A That was the recommendation from the bank on what
we told them what was come in and everything else. And
because it was a high-dollar amount, they wanted to open a
different type of account, and they moved us over to the
main branch on Howard Hughes Parkway.
Q Okay. Fair enough. And then just below that a
couple of pages down, it shows a withdrawal for $677,494.
That's the sale of the home; right? That's the escrow for
the purchase of the home?
A Yes. Yes.
Q Okay. Now, I want you to go and look at page --
paragraph 10 of your declaration?
A Yes.
Q Okay. And paragraph 10, I guess the part I'm
referring to and want to talk about now is the part where
you say that you never forwarded your Nevada mail to
Nevada. Do you see that -- or to California. Do you see
that?
A Yes, the last -- the last sentence?
Q Yeah. You never forwarded your mail to
California. Do you still understand that to be true?
A Yes. I don't recall any -- ever forwarding mail
to California.
Q And the reason why I ask is that, you know, as we
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 113
talked about when we look at your declaration, is you
essentially did not spend a single night of the month of
May in Nevada. And if you look at your presence in Nevada
for the month of April, you know, you're barely there as
well.
So it just seems kind of strange to me that you
would not have your mail forwarded to you when you were
essentially gone from Nevada for about a two-month period
and were in California. Are you certain that you did not
have your -- your Nevada mail forwarded in the months of
April and May?
A I don't recall doing it.
Q You don't recall doing it. All right. And then
in paragraph 12 you state that you terminated your PO Box
in Escondido on July 23rd, 2008; true?
A Yes.
Q Okay. And this was approximately a week after
you sold Jimsair; true?
A Yeah. Yes. More or less.
Q Yeah. And if you could just move to Exhibit 7,
and that's the change of address confirmation.
A Okay. I have it.
Q And if you read the first paragraph, it looks
like you notified the postal service to start the change
of address on July 23rd, 2008. Do you see that?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 114
A Yes. But that's only for what -- what hadn't
been switched over.
Q Yeah. And I guess that's the issue I have
with -- I mean, what exactly is switched over that was
important if you're spending so much time in California,
in fact, virtually two months, and you are not forwarding
it to California. Do you understand the dilemma I have?
A I hear what you're saying, but we -- you know,
there's a lot of -- there's a lot of our correspondences
that have the address changes on it.
Q Yeah, yeah.
MR. MARKOW: I hate to interrupt. And I hate to
interrupt. I know we're not using -- the questions are
getting pretty argumentative.
MR. HOFSDAL: I don't -- I don't think they're
getting argumentative at all. I'm just trying to -- it
may be compound, but --
MR. MARKOW: I'm addressing -- I'm addressing the
Judges, and I hope you would do the same.
JUDGE TAY: Thank you, Mr. Markow.
Mr. Hofsdal, you can continue with your
questioning, but if you could just keep it amicable and --
please continue.
MR. HOFSDAL: Yeah.
BY MR. HOFSDAL:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 115
Q Now, I want you to look at paragraph 13 from your
declaration.
A Paragraph 13. Okay. Yes.
Q Okay. And do you see in Box 11 where it says, "I
swear and affirm?"
A See what again?
Q In Box Number 11 it says, "I swear or affirm."
A Oh, I'm reading -- I'm reading my declaration.
Q No. No. The document?
A What document do you want me on?
Q Okay. First, I want you to read and review your
paragraph 13, which is about registering to vote?
A Okay. On my declaration, yes.
Q And then I want you to go ahead and turn to
paragraph -- or Exhibit 8?
A Eight. Okay.
Q And then in Exhibit 8 if you look, there's
numbers corresponding to different elements of the
application?
A Okay.
Q Okay. And there's a paragraph numbered 11. Do
you see?
A Yes.
Q Okay. And do you see one, two -- about three
lines down starting at the end it says, "The present
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 116
address listed herein is my sole legal place of residence,
and I claim no other place as my legal residence." Do you
see that?
A Sure.
Q Okay. And then you sign and dated that on
February 27, 2008; true?
A Yes.
Q And the address you identified is the apartment
address; true?
A The -- yes. The apartment address is on the
application here.
Q Right. So I understand that when you sign this
document you had a future intent to make that a legal
place of residence for you. But isn't it true that at the
time you signed this document that you did not have
possession of an abode as residence is defined in
Nevada -- in Nevada?
A We -- we had already signed the agreement for the
apartment.
Q I guess my question is, Mr. Bracamonte, is did
you jump the gun by registering to vote before you had a
permanent abode in Nevada?
A Well, I have one document here signed the 26th at
the apartment.
Q But you did not possess that apartment on the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 117
26th; true?
A Well, I didn't know it at that time.
Q You didn't know what?
A When exactly we were going to take possession of
it.
Q Well, you knew when you signed the voter
registration that you did not possess that property at
that time; true?
A Well, now I disagree with what you're trying to
do here. It's just our real intention was to have an
apartment, relocate in Nevada. And if we're off a day or
two, I'm not sure I understand what the issue is.
Q Well, I guess the issue is whether or not you
essentially jumped the gun in one, registering to vote and
two, obtaining a driver's license as you have to be a
Nevada residence to A, vote, to B, register to vote. And
residency in Nevada is defined by possessing a permanent
abode, of which you may have had an agreement to possess a
future abode. But at the time you signed this document
and had your driver's license, do you agree with me that
you did not have possession of a permanent abode in
Nevada?
A There was no voting in Nevada for another five or
six months.
Q I understand that. I know -- I think the next
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 118
election was in August?
A Okay. I do not agree with what you're trying to
do. Even though we -- this was just all automatic at the
time we obtained our driver's license. There was no -- no
voting that took place in Nevada, I think, for another
five or six months. And so I'm not sure I see what the
issue is.
Q Well, I'll try one more time, and then we'll move
on. It's that you affirmed, and you swore that you had a
legal place of residence at the time you signed this
document on February 27th, 2008. And the reality is you
did not, at that time, possess a legal residence in
Nevada?
A I -- I had something to go show the DMV because
the apartment address is on here, and our mailing address
is on here. So we had to have some kind of proof to take
to the DMV that was satisfactory.
Q But I'm talking about what may or may not have
satisfied the DMV. I am talking about your affirmation
where you swear that you had a legal place of residence in
Nevada on February 27th, and you did not?
A Whatever documentation we supplied to the DMV
showed our mailing address and the apartment, and
obviously it was satisfactory.
Q So my question now is, why did you feel compelled
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 119
to get a Nevada driver's license and register to vote in
Nevada before you even had possession of an apartment in
Nevada?
A We couldn't -- I think we mentioned earlier in
the questioning, we couldn't get an apartment unless we
had a mailing address. And so the -- or we couldn't get a
driver's license or register our vehicle unless we had a
place -- an address and a place to live. So it was almost
like a catch 22. Which do you do first in order to
complete the cycle here?
I'm telling you that, just looking at this
document, we took the apartment agreements with us to the
DMV. We took the Outpost mailbox information to the DMV,
and it was satisfactory to them. And we obtained our
driver's license. We weren't really ready to register the
car because that took time. But the documents that we had
in our possession that we took to the DMV was satisfactory
for this application.
Q Okay. I don't think you're asking the question.
I understand all that. But my question to you is, what
compelled you to apply for a Nevada driver's license
before you even had a permanent abode and register to vote
in Nevada before you had a permanent abode, when under
Nevada law, you had 30 days to obtain a California [sic]
driver's license. And as you suggested, the next election
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 120
in Nevada was not until August of 2008?
A We -- we decided to relocate to Henderson. And
one of the first thing on the list was driver's licenses,
place to live, a mailbox, and then we started changing
addresses. We obtained an attorney later on to update our
trust with the intention that we would buy a house in
Nevada using the trust.
So, you know, I -- I don't think there's a
checklist that says you have to do this first and this
second. We were doing the best we could to complete the
cycle, you know, to relocate. And we started with those
items: The apartment, the mailbox, our driver's license,
voter registration.
Q So what I understand from what your telling me,
and you can correct me if I am wrong, is that you either
had a list or somebody provided a list to you of things
you needed to do in order to become a California
non-resident; is that true?
A Nobody provided a list. It was obvious that,
yeah, whatever we had or did in California has to be
replicated over in a different state.
Q Okay. So -- so in other words, you were kind of
akin to following a recipe, right, in order to be deemed a
California non-resident, I needed to do X, Y, and Z; is
that true?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 121
A I lost you there.
Q Okay.
A I didn't hear you.
Q From what I gather from what you had testified to
just a couple of minutes ago, you had actually called it a
list, a list of things to do. And that was voter
registrations, driver's license, hiring an attorney and
stuff like that. And I'm just saying -- and I'm
suggesting and asking you, did you have a list of things
you had to do or things you believed you had to do in
order to be deemed or considered a non-resident of
California?
A Yeah, we probably made a list of things we had to
do.
Q Right. So, basically, what you were doing at
your earliest convenience was you're basically trying to
check off as many of the items on that list as you
possibly could do; true?
A Yes. We had a lot of -- there were a lot of
things that we needed to do.
Q Okay. Just give me a second here. I lost my
place.
A Sure.
Q It's also my understanding that under Nevada law
that they actually have a reciprocity type of agreement,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 122
whereby, you have a Nevada driver's license -- oh, excuse
me -- whereby, if you have a California driver's license,
in lieu of taking a written test and a driving test, alls
you have to do is merely turn in your California license
in order to obtain a Nevada license; is that true?
A I don't know.
Q Okay.
A We -- we did turn in our driver's license.
Q And you didn't have to take a written test or a
driver's test or anything; true?
A We don't seem to remember that.
Q Now, isn't it true that when you moved into your
Nevada home in September that you changed voting
precincts?
A We don't -- I don't -- we don't -- I don't
recall.
Q Okay. You don't recall if you had to change from
the 8th precinct to the 9th one? And do you recall --
A You know, we're -- we're five miles from where
the apartment used to be. So, you know --
Q So you don't -- and you don't recall on or about
June 11th of 2009, some nine months after you moved into
the Nevada home, that you had to reregister in your new
district?
A This is in 2009 you say?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 123
Q Yeah, in 2009. So what I'm saying is you bought
your home in September; right?
A No, I don't recall that.
Q Okay. So you have no recollection of needing to
change precincts, or the like, after you purchased your
Henderson home?
A Do you mean a change of address?
Q No, in order to vote, voter registration.
A I don't -- you know, we don't recall it.
Q Okay. Fair enough. Now, isn't it true that
Nevada residents have to register all of their vehicles
that they're operating on Nevada roads at the time they
apply for a Nevada driver's license?
A I don't know what the law is here.
Q Okay. Nevada Revised Statute 482.385, basically,
informs the people who are moving from one state into
Nevada, that they have either 30 days or the date that
they obtained their driver's license to register their
vehicles that they're going to operate on Nevada highways.
Were you aware of that?
A No.
Q Now, that statute also compels persons who work
at the Department of Motor Vehicles to inform people who
apply for a driver's license that this is the law, and
this is the requirement under Nevada law?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 124
A Okay.
Q Do you remember as to whether or not you were put
on notice at the time you applied for a driver's license
that you also had to register your car in Nevada?
A I don't remember anyone putting us on notice.
Q Okay. And isn't it true that the only vehicle
you registered in Nevada was the Chevy Avalanche, despite
driving other vehicles on Nevada freeways and roadways?
A Well, I told you the Escalade that my wife drove
was registered to Jimsair. The other personal car was the
Avalanche that I drove.
Q But it's my understanding -- and you could
correct me if I am wrong -- that on or about June 8th, you
and Mrs. Bracamonte assumed the lease of the Escalade and
thus transferred title from Jimsair to you?
A That's right.
Q Okay. So did you, at any time after that
transfer, register that vehicle, which you admitted
earlier was on Nevada roadways, in order to comply with
Nevada law?
A The lease on that vehicle was just a few months
away. We weren't going to go reregister it. It was a
lease that we were going to turn -- we were going to turn
the vehicle back in.
Q Yeah. I understand that, but the question is,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 125
did you comply with Nevada law, which requires vehicles
that is registered in your name and is driven on Nevada
roadways, to be registered in Nevada?
A The vehicle was not registered in Nevada.
Q Okay. And it's my understanding that the Chevy
Avalanche was registered in Nevada about three months or
so after you obtained your California driver's license;
true?
A Yes.
Q So in theory, your duties as an alleged Nevada
resident as it pertains to registering that vehicle, were
not complied within a timely basis. Would you agree?
MR. MARKOW: That would cause for him to
interpret the statute and determine its timeliness under
the statute. Your Honors, he can ask when he registered
or didn't, but that's a complete legal question.
JUDGE TAY: This is Judge Tay. Mr. Hofsdal, I
think you can move on to your next question. We
understand your point.
MR. HOFSDAL: Okay. Thank you.
BY MR. HOFSDAL:
Q I'll move on to Exhibit 12-7. This is the
document that you pertained to earlier.
A The 7th one, did you say.
Q Yeah, the 7th one.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 126
A Okay.
Q Okay. And just the language that you were
talking about with your attorneys earlier, talking about
the -- in the umbrella?
A Yes.
Q Do you see that?
A Okay.
Q And do you know who wrote that? I forget -- I
don't recall who you said may have written that?
A No. That's not my handwriting.
Q Okay. Now, the way I understand umbrellas to
work, and maybe you have no understanding, but is that you
have to have a couple of things. You need to have,
essentially, a personal liability policy that's somehow
associated with a home. So was your home in San Diego the
qualifying property in order to have an umbrella property
or an umbrella policy, excuse me.
A An umbrella may have been linked to that house.
Q And now I want you to look at Exhibit 12, pages
11 to 12, and that's the Jiffy Lube?
MRS. BRACAMONTE: Jiffy Lube.
MR. BRACAMONTE: Which one?
MRS. BRACAMONTE: The Jiffy Lube.
MR. BRACAMONTE: Oh, the Jiffy Lube. Yeah.
BY MR. HOFSDAL:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 127
Q I have to find it. Sorry.
A Oh, here it is.
Q All right. And then the thing I want to point to
is the -- is the mileage. It looks like when you had that
car serviced, it was serviced at 46,546 miles. Do you see
that?
A Yes.
Q Okay. And if you go back to the inspection of
the vehicle, and that occurred about two weeks earlier,
right. The mileage on that report was 4,000 -- 44,782,
for a difference of about 1,764 miles driven in a two-week
span. Is it safe to say that you -- and when you came to
Nevada and went back to California that you typically did
so in that Avalanche?
A On June 13th?
Q On March 6, 2008, you had an inspection, and it
was 44,782 miles on it.
A This is Jiffy Lube?
Q Yeah. I'm looking at Exhibit 12 page 11.
A I have three Jiffy Lubes here. One is dated
March 21.
Q Right.
A The next one is dated May 19th.
Q Right?
A And then June 13th.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 128
Q Right. Right.
A Okay.
Q And what I'm doing is I'm just taking us back two
weeks to March 6th, 2008, when you had your car inspected.
I believe that's --
A Oh, for the smog.
Q Yes. 12 --
A Oh, okay.
Q Do you see where the odometer was 44,784?
A Yes.
Q Okay. And the only thing I'm asking is, is based
on the difference in the miles, it looks like in a
two-week span you traveled some 1,764 miles; which leads
me to believe that when you traveled between California
and Nevada, you traveled in that Avalanche; true?
A Yeah, most -- most likely. And of course, if I
went down to downtown San Diego, I would use the
Avalanche.
Q Sure. So, basically, and the point I'm trying to
make -- and there's also a big mileage in discrepancy on
the next one as well in a very short period of time. But
the point I'm trying to make is -- and maybe not as clear
as I would like to -- is, essentially, that when you were
in California, that Avalanche was with you in California;
true?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 129
A I -- we also used the Avalanche to go to Lake
Havasu.
Q True. Yeah. So where you were, the Avalanche
was?
A Generally, yes.
Q Okay. So when you were in -- for example, when
you were in California for the whole month of May, your
Avalanche was in California for the whole month of May as
well; true?
A Yeah, most likely.
Q Okay. Do you recall the Avalanche being in
Nevada when neither you nor your wife were in Nevada?
A Yeah. I think we took some flights out of there,
and we left the car there.
Q Okay. And when you took the flights out of
Nevada, did you fly to California or other places?
A Other places.
Q Other places, yeah. So it's pretty much true
what I said earlier is that, when you were in California
the Chevy Avalanche was with you in California?
A Yes.
Q Yes. Okay. And then if you can look at page 29
of your declaration, if you could read that?
A Okay.
Q Isn't it true that every vehicle you identified
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 130
in this paragraph, right, with the exception of the golf
cart, changed its registration from California to another
place after the sale of Jimsair?
A Yes.
Q Thank you. Now, I want to go talk about the cell
phones a little. If you could go to Exhibit 10, I believe
you talked about this a little bit with your attorney.
Okay. Now, I see from this AT&T statement that just you
received a cell phone. Yet, you testified earlier that
both you and your wife had received a cell phone. Is it
your understanding that both of you had received a Nevada
cell phone on February 26th?
A Yeah, we both -- we both did.
Q Okay. Because on page 2 it just shows Juan
Bracamonte with a number. I don't see anything about
Mrs. Bracamonte. So is that on a different agreement
that's not part of the record?
A It would have been a different agreement. I
eventually changed my number. She kept hers, but we got
them at the same time.
Q Now, isn't it true throughout the 2008 tax
year -- it's a whole year -- including the time when you
purchased the Henderson, Nevada home, isn't it true you
also maintained cell phones in California?
A I don't recall that.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 131
Q With Verizon Wireless, perhaps?
A Might have been a company phone.
Q And would company expenses normally be coming out
of your personal bank account?
A I don't really remember. I don't remember. I
don't remember a --
Q Okay. Fair enough. Let's go ahead and look
at -- I won't go through each month but through the
relevant times. If you'll go to document BB-32?
MRS. BRACAMONTE: B --
MR. HOFSDAL: BB-32.
MRS. BRACAMONTE: BB-32.
BY MR. HOFSDAL:
Q And if you go one, two, three, four transactions
up from the bottom.
A Yup.
Q And then you see probably where the number is,
0001. Does that refresh your memory as to whether or not
the same time you maintained a cell phone in Nevada you
also maintained cell phones in California?
MR. BRACAMONTE: I don't recall. Do you?
I don't recall keeping it.
BY MR. HOFSDAL:
Q Okay. And let's try one more. Let's go to
BB-58?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 132
MRS. BRACAMONTE: 58.
BY MR. HOFSDAL:
Q Yeah, BB-58. And the reason why I'm pointing
this out is that is well after the sale of Jimsair. I
just want to -- and if you go, 1, 2, 3, 4, 5, 6, 7, 8, 9,
10, 11, 12, 13 from the bottom?
A Yeah, I see that.
Q Okay.
A You see an AT&T right below it?
Q Yeah. I'm not disputing that you had a cell
phone in Nevada. The point I'm trying to make is that at
the same time you had a cell phone in Nevada, you also had
a cell phone in California.
A Yeah. Well, from the billing it looks that way,
but right now I -- we just don't recall that.
Q Okay. Fair enough. And just so you know, if you
go through the whole year, the charges in each month is
about the same. I'm not going through each month but --
A Okay.
Q And now I want to talk about the trailer a little
bit. If you can go to paragraph 18 of your declaration?
A You say 18?
Q 18, yeah. Paragraph 18.
A Okay.
Q All right. Now, it's my understanding this
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 133
trailer was some 28-feet long; is that true?
A It was what again?
Q 28 feet long?
A Yes. Yes.
Q Yeah. And eight-and-a-half-feet wide?
A Uh, eight -- eight-feet wide yeah.
Q Four wheels?
A Yes.
Q Okay. Now, we talked earlier about the cars that
were registered with the apartment or the vehicles, and I
don't think that 28-foot truck would fit in one of those
parking spaces anyway. So when you purchased that
trailer, where did you store it?
A Escondido.
Q In Escondido?
A Yeah.
Q Yeah. So you bought the trailer in Nevada and
then you drove it to Escondido and kept it in Escondido?
A We had some acreage there, so I had some room for
it.
Q Okay. Right. Now, what vehicle did you use to
tow this thing? I mean, the Avalanche seems like what --
like, about 7,500-pound capacity or so?
A We had two vehicles. The Dodge Ram --
Q Okay.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 134
A -- and we had an Excursion.
Q Excursion. So when you picked up the vehicle in
the trailer center in Nevada, and you towed it down to
Escondido, did you use the Ram, or did you use the
excursion?
A Neither one. I had a third party deliver it.
Q Third party deliver it. Okay. While it was in
Escondido and for other purposes, you mostly used the Ram
and the Excursion?
A The trailer we normally -- I bought it for a
couple of reasons. I figure I was going to need it later
on here to Henderson bringing furniture up and everything
else, and moving some of this stuff out of Escondido, more
on the personal side, boxing up stuff. The other thing we
used it for was to tow a motor home.
Q And that's what I thought. I thought it was more
of a motor home purchase than anything. I know you went
to -- kind of my dream is to Utah, Wyoming, and Montana.
And I figured you probably towed that trailer behind the
motor home?
A Yeah.
Q Now, did you ever on occasion -- you know, I know
you had two Harleys. You bought the one there at Biggs
there in San Marcos, and then I believe you had a
Sportster too, right?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 135
A What?
MRS. BRACAMONTE: A Sportster.
MR. BRACAMONTE: Oh, Sportster. Yes. The
Harleys you're talking about? Yes. Yeah.
BY MR. HOFSDAL:
Q That was the -- I used to represent Harley
Davidson. So I'm trying to think of this delicately.
Now, was the Sportster your wife's motorcycle?
A No. That was mine.
Q It was yours? Okay. I didn't mean to insult
you. And the one you bought at Biggs and that was the
electra glide, right?
A I can't get her near -- I couldn't get her near
them.
Q So I have to ask you is, is when you went on
these trips -- I know you had service of the motorcycles
in Montana. Was that trailer used in part to -- to tow
those motorcycles around?
A No. I had a lift in the back of the motor home.
Q Okay.
A Hydraulic lifts for bikes.
Q Okay. Okay. And that -- is that the motor home
that's registered in Arizona?
A The motor home was registered in Montana.
Q In Montana?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 136
A Yeah.
Q You own property in Montana?
A Is what?
Q You own property in Montana?
A No.
Q No. Now the motor home was registered in
Montana, but did you store it at one of those facilities
or warehouses you had in Arizona?
A We moved the motor home around. We had a spot
for it down in Indio. Sometimes we kept it in Arizona.
We had an in-door storage.
Q Okay. So the motor home was in California and
Arizona. Was it ever in Nevada?
A No. We don't -- well, up -- starting --
Q It's okay if --
A -- space here in --
Q Okay. All right. Fair enough. Now, I want you
to look at Exhibit Z-34?
MRS. BRACAMONTE: Z-34. Are you on Z?
MR. BRACAMONTE: Z. Okay.
BY MR. HOFSDAL:
Q Okay if you go 1, 2, 3, 4, 5, 6 and 7 from the
bottom?
A Okay.
Q Okay. There's a charge there for Freeway Trailer
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 137
Sales in Escondido. And that was about the time you
purchased the trailer in Nevada and that you had moved
to -- or shipped to Escondido. Were you preparing one of
your vehicles the Ram or Excursion to tow that? And that
was maybe a ball or something?
A Are you talking about the $38 charge?
Q Yeah. The $38 charge for the -- I don't know if
$38 or it's the $81 the day behind, to be honest with you.
It's hard to read these out. I don't think the dollar
amounts other than you had some type of purchase or some
type of service at Freeway Trailer Sales in Escondido
about the time you purchased -- I'm sorry.
A I would go there to buy parts.
Q Parts. Okay. So do you recall what part you
purchased about that time you bought that trailer? Was it
something to tow that trailer?
A No. No.
Q Okay.
JUDGE TAY: This Judge Tay. Mr. Hofsdal, I think
we should take a break in about 15 minutes or so. Your
cross-examination has been over two hours now. So I'm
going to ask you to finish up and just ask the more
important questions that you have in the next 15 minutes.
And then we're going to bring it back to Mr. Markow to
continue his presentation.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 138
MR. HOFSDAL: Okay. Fair enough.
BY MR. HOFSDAL:
Q Now, I want you to look at your declaration at
paragraph 20.
A Okay.
Q All right. And we're talking about the
coordination of the Jimsair sale. Do you see that?
A Yes.
Q Okay. Now, I was kind of curious, based on
testimony you've given. And I just want to recap, and you
could tell me where I'm right and where I'm wrong. We've
already established the fact and that you spent the entire
month of May each night in California. You were
approached to buy Jimsair in May. So you're in California
at the time.
And then if you look at Exhibit AA-2, I believe
it is, right. It reflects that on June 2nd you -- on
June 2nd, and you were in California, right. And then it
looks like on June 2nd you jumped in your Avalanche. What
is it, a four-and-a-half or five hours drive from
Escondido to Henderson? Page A-12. I'm sorry. Four from
the top, and there's two deposits into a bank account for
$500 on June the 2nd.
A I'm looking at all the dates. Yeah. June 2nd we
were in Henderson for three nights.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 139
Q Yeah. I understand starting June 2nd you were in
Henderson, Nevada, but on the morning of the second? And
I'm showing you AA-12, which reflects deposits made into
your bank account on June 2nd.
A Okay.
Q Okay. Do you see that? So it looks like you
spend the whole month of May in California. You start
negotiating the sale of Jimsair in May. On June 2nd
you're -- wake up in the morning, do some banking and some
errands in San Diego. Then you drive some four and a half
or five hours from Escondido to Henderson, right? And
that same day you execute the documents that you refer to
on -- in your paragraph 20?
A I have to look at the documents to see what was
actually signed.
Q That's your Exhibit 14. Exhibit 14.
A 14. Okay.
Q See where it was signed on --
A I can see. It looks like it was faxed over.
Q Right. So my question to you is that you say --
and I'm going to speed up here because I only have a short
amount of time here. And you say here at paragraph 20
that you coordinated a significant portion of the sale
from Nevada. And the two things you do to reference that
is this June 2nd document when you basically just arrived
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 140
in Nevada on that day and --
A Okay.
Q -- and you signed it. So I think it's safe to
say with regards to the June 2nd document, you didn't do,
really, any coordinating in Nevada. Would you agree with
that?
A I had to coordinate to receive it.
Q Okay. So that was significant. Okay. I gotcha.
And then you were in Nevada for, like, two or three days.
You go back home, right. You go back home. And on
June 11th -- on June 11th, the other document you
reference, which is your number 14 --
A I'm going to go back. We were in Montana for
some of these documents. Yeah.
Q So as far as the document on -- as far as the
Exhibit 14, would you agree again that the significant
portion that you're referring to was essentially just
receiving it and signing it?
A I -- I don't think it's all that simple.
Q Well, it was all negotiated before you arrived in
Nevada, right? You were in Nevada -- I mean, you were in
California the morning of June 11th --
A The negotiations went --
Q -- where the documents were signed.
A The negotiations went surprisingly quick with
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 141
Landmark.
Q Yeah. No. I understand that, but your sentence
is, "We coordinated a significant portion of the sale from
Nevada." You referenced two documents. One signed to
support that, one that's signed on 6/2, which is basically
the day you arrived after a five-week stay in California,
which included the sale of Jimsair. And then the second
one after you go back for about five days.
You come back after leaving. Waking up in the
morning of 6/11 and going back and signing that document
on 6/11. So the point I'm making is, isn't it true that
the significant portion of the negotiating and
coordinating actually took place in California.
A Okay. I'm not going to agree with that. I know
we were in Montana when some of this stuff took place.
Q Okay. Well, would you agree to this?
A Not Montana. Yellowstone. Excuse me.
Yellowstone.
Q Okay. So would you agree with this. You say,
"We coordinated a significant portion of the sale from
Nevada," that it either occurred in California or
Yellowstone?
A We signed the paperwork in Nevada.
MRS. BRACAMONTE: We signed the paperwork in
Nevada. That means we weren't in Yellowstone.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 142
MR. BRACAMONTE: Yeah. No. I'm -- I'm not --
I'm not going to say that. I don't -- I'm not in
agreement with that.
BY MR. HOFSDAL:
Q Would you agree this? Is that -- is that on the
morning of the 2nd and the morning of the 11th --
A Okay. So -- so we happened to sign this document
the same day we arrived in Nevada.
Q Okay. All right. All right. If you go to your
paragraph 24?
A Okay.
Q All right. It says you saw an eye doctor on
March 6, 2008; right?
A Yes.
Q And you attached a -- among other things -- and
you attached a prescription for new eyeglasses as part of
that exhibit. Do you see that?
A Yes.
Q Okay. Can you now look at Exhibit BB-31?
A Yes.
Q Can you go about 1, 2, 3, 4, 5, about 6 entries
down?
A Yes.
Q Okay. And there's a charge for -- or from Lens 4
Less Optical from Escondido. Do you see that?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 143
A Yes, I do.
Q Did you have that prescription filled in
Escondido for those glasses?
A No. They're probably for my wife.
Q Okay. Okay. So while you're seeing an eye
doctor in Nevada, your wife at the same time is seeing an
eye doctor in Escondido?
A No. That was just -- this Lens 4 Less was just a
place to buy glasses.
MRS. BRACAMONTE: I think they had my
prescription, and I think --
MR. BRACAMONTE: Oh, she thinks they might have
had her prescription.
MRS. BRACAMONTE: And they just --
MR. BRACAMONTE: Yeah.
MRS. BRACAMONTE: -- filled them.
BY MR. HOFSDAL:
Q Okay. And then if you'll go to Exhibit X-19?
MRS. BRACAMONTE: What did you say?
MR. BRACAMONTE: Which one again?
BY MR. HOFSDAL:
Q X-19.
A X-19.
Q Four up from the bottom?
A Okay.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 144
Q And there's a charge there for close to $6,000
for hearing aids. Do you see that?
A Yes.
Q And those hearing aids, they were for you?
A Yeah.
Q Now -- and my daughter is hearing impaired. She
goes to the National Institute of the Deaf. And I know
how personal hearing aids are -- molding and all that kind
of stuff. Why did you choose to have your new hearing
aids purchased in California versus Nevada?
A I was going to this guy here for probably at
least 15 years, and I was comfortable with him. And
sometimes I just drive over there, even after we sold the
business and lived here. I would just drive over there
just to go to him to buy new hearing aids because I was
comfortable with him.
Q Sure. Right. And who is servicing your hearing
aids now?
A A year ago I finally switched over to a doctor
here in Henderson.
Q Who is Dr. Grant Kingsbury?
A Kingsbury?
Q Yeah.
A He was just a general practitioner, a general
physician.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 145
Q And -- and he was your doctor?
A Yes.
Q Okay. And you saw him in 2008?
A I may have sure.
Q March 13th?
A I don't know the date.
Q Okay. And then did you go to San Diego podiatry?
A Yeah. My wife doesn't think so. I don't think
so.
Q Okay. There's a -- if you go to Z-34?
A What again?
MRS. BRACAMONTE: Z-34.
MR. BRACAMONTE: Oh, Z-34.
JUDGE TAY: This is Judge Tay. Mr. Hofsdal, last
question or last couple of questions, please.
MR. HOFSDAL: Sure.
MR. BRACAMONTE: Okay. I'm on 34.
BY MR. HOFSDAL:
Q Okay. You see about five entries above the
trailer on 512?
A What am I looking for?
Q San Diego Podiatry Group.
A I see that.
Q Okay. And does that refresh your memory as to
whether you or your wife was taking care of some foot
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 146
issues back then?
A I don't know.
Q $45. I don't know if it's at the top or the
bottom. I'm guessing it is.
A Yeah. I don't recall what it's for.
Q So other than the eye care provider in Henderson,
Nevada, is there any other medical provider you or your
wife, that you're aware of, visited prior to the sale of
Jimsair?
A I -- I testified earlier that we did not really
locate any doctors here until after we bought the house
because we wanted to keep the doctors close by.
Q Sure. So then -- yeah. So then it's safe to say
that all the medical care that you and your wife required
up to the sale of Jimsair, whether it's through
Dr. Kingsbury, the hearing aid company, the vision, was
all provided for in California; true?
A Yes, if you want to characterize it that way.
Yes.
MR. HOFSDAL: That's all I have, sir. Thank you.
JUDGE TAY: Thank you very much, Franchise Tax
Board. We're going to take a 15-minute -- oh, sorry.
We're going to take a 10-minute break and come back at
3:27. And after the break we will allow Mr. Markow to
continue with his presentation.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 147
(There is a pause in the proceedings.)
JUDGE TAY: Let's go on the record now.
This is Judge Tay. I'm going to ask my panelists
to see if they have any questions for Mr. Bracamonte,
since he just finished his witness testimony.
And so first I'll ask Judge Johnson.
JUDGE JOHNSON: This is Judge Johnson. Thank
you, Judge Tay. Good afternoon, Mr. Bracamonte.
MR. BRACAMONTE: Hi, how are you?
JUDGE JOHNSON: Good. Thank you. Couple of
clarifying questions. I think in the background we were
talking about cell phones. Mrs. Bracamonte mentioned that
it could be some other persons. I don't know if it was a
relative or a son or something like that. Just so we know
that when we're looking at the statements that they all do
pertain to your activities. Did you have another user on
your accounts or a son or someone that would be able to
make purchases on your accounts? Or was that cell phone,
perhaps, for a son?
MRS. BRACAMONTE: It might have been Joel's.
MR. BRACAMONTE: It could have been our youngest
son.
JUDGE JOHNSON: Okay. And that was in --
MR. BRACAMONTE: It might have been our youngest
son.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 148
JUDGE JOHNSON: And he was in California; is that
right?
MR. BRACAMONTE: Was that -- repeat that, please?
JUDGE JOHNSON: He was in California during 2008?
MR. BRACAMONTE: He lived in -- yes.
JUDGE JOHNSON: Okay. Thank you. And then a
couple of dates were brought up with regards to deposits
being made. I know the June 2nd date was brought up when
you signed paperwork in Nevada later that day. Also, the
deposit around the two-day auction was also brought up.
MR. BRACAMONTE: Yes.
JUDGE JOHNSON: And I believe both those days
are, kind of, Mondays. I know this one statement actually
says, "Night Drop." I think the other one said, "ATM
Drop". Would you often make deposits on the weekends
using ATMs or other drop boxes?
MR. BRACAMONTE: No. The banks are open until
about 3:00 o'clock.
JUDGE JOHNSON: On, like, Sunday as well?
MR. BRACAMONTE: What's that?
MRS. BRACAMONTE: Did we ever make ATM deposits,
honey.
MR. BRACAMONTE: No. No. Not -- with cash? No.
JUDGE JOHNSON: Okay. With check as well?
MRS. BRACAMONTE: With a check, yes. Probably.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 149
MR. BRACAMONTE: We may have done some, yes.
JUDGE JOHNSON: Okay. I'm just asking to see
if -- some of those days are actually when the bank opens
on Monday and deposits the checks for you, even though you
may have dropped it off the night before, something like
that. It's just to see whether or not it was that morning
that you deposited it and then drove to Nevada.
MR. BRACAMONTE: Oh, I see. Yes, it's possible.
JUDGE JOHNSON: Okay. And one thing -- and
forgive me if this is already covered in the briefing, and
I might have overlooked it. But I believe the apartment
that you had rented was a six-month lease; is that
correct.
MR. BRACAMONTE: Initially, yes. Then we
extended it one month.
JUDGE JOHNSON: Okay. And that carried you into
when you can move into your new home?
MR. BRACAMONTE: We moved to the new home on --
we closed on September 22nd, 2008, then we moved into our
house. Yes.
JUDGE JOHNSON: So you had the apartment all the
way through that period?
MRS. BRACAMONTE: Yes.
MR. BRACAMONTE: Yes.
JUDGE JOHNSON: Okay. And I know they asked
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 150
about a moving company to go to the apartment. You said
you didn't have a moving company then. But did you hire a
moving company to move into your Nevada home?
MR. BRACAMONTE: No. We did it ourselves. We
used the trailers and the vehicles we had. We bought a
bunch of furniture down in Lake Havasu. We stored it.
All of that was brought up here. And I think we may have
-- while we were in California, we bought some furniture
down there that we stored in the house and we brought up
here. And the rest of it we bought locally here in Las
Vegas.
JUDGE JOHNSON: Okay. That's all. Thank you
very much.
MR. BRACAMONTE: Okay.
JUDGE TAY: Thank you, Judge Johnson.
Judge Le, any questions for Mr. Bracamonte?
JUDGE LE: Yes, this is Judge Le. I just have
one question. I wanted to know if you considered your
Nevada rental apartment as your permanent home?
MR. BRACAMONTE: What?
MRS. BRACAMONTE: Was our apartment our permanent
home? Permanent for the time while we --
MR. BRACAMONTE: Yes, while we were here.
JUDGE LE: Okay. Thank you.
MRS. BRACAMONTE: It was permanent until we found
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 151
our final home. Yes, we considered it.
MR. BRACAMONTE: Until we bought a house. Yes.
JUDGE LE: Okay. Thank you.
JUDGE TAY: Thank you, Judge Le. This is
Judge Tay. I don't think we have any further questions
from the panel at this time.
So I'd like to turn it over to Mr. Markow to
continue his presentation, please, whenever you're ready.
MR. MARKOW: Thank you Judge Tay. And I'd like
to ask Jacqueline some questions. I know she's been doing
a little bit of answering during Phil's testimony, and I'm
going to try not to plow the same ground that we have with
Phil with Jacqueline. So hopefully this will be
substantially less lengthy in time. So with that I'd like
to ask Jacqueline some questions.
MRS. BRACAMONTE: Okay. I'm here.
MR. MARKOW: May I proceed?
MRS. BRACAMONTE: Yes.
MR. MARKOW: I was actually asking the Judges
that, but that's okay.
JUDGE TAY: Yes, Mr. Markow, please do.
MR. MARKOW: Thank you.
///
///
///
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 152
DIRECT EXAMINATION
BY MR. MARKOW:
Q Jacqueline, first it's sort of an overall
question. You sat here and you've listened to Phil's
testimony over the last few hours, and I know he's covered
a lot of ground. But was there anything that you heard
where you said that you think that he may have gotten it
wrong or you want -- you have a different memory of
something that you would want to jump in and you say, oh,
no. Phil isn't remembering that right, and you kind of
disagree with him. This is your chance to say what you
say happened.
A Well, gee, for the most part everything he said I
have similar memories. I mean, people always have
different memories. As far as my mother's illness, she
got ill after Christmas and was in the hospital for a
while and then was transferred to Redwood Nursing
establishment. For clarification, I spent a lot of time
at the rental apartment. I was going to open houses. I
was even before we went to --
Q Hang on for a second. Hang on for a second,
Jacqueline. I'm going to ask you about that. I literally
just wanted to know whether you sat there and said, "No
way, Phil, you got that wrong?"
A No. I can't say that about my husband.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 153
Q Strangely my wife says that all the time.
A Does she?
Q In any event -- all right. Terrific. Well, you
did mention the house, and I did hear you talk about that.
What was your role in the process of -- let's even back up
for a second. When you came to Nevada in February, and
you looked for apartments, what was your role in that?
A Well, looking at a place that would be
comfortable for us to be and comfortable while we looked
for a house; and a place that had easy access and was
roomy enough for us to manage.
Q You know, Phil had mentioned something about a
list that he felt that either he or you or you both had
put together in connection with your move. Did anyone
hand you a list and tell you here are things you need to
check off to officially move from one state to another
state?
A Well, you have to know one thing about Phil. He
makes lists all the time. To this day he will give me
lists. And --
Q No. My question is very specific here,
Jacqueline. Did anybody ever hand you a list and say,
"Here's what you have to do to successfully show that you
had moved from California to Nevada?"
A No. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 154
Q However, in the move there are so many details
that you have to put a list together; correct?
A Yeah, that's our -- that's our strategy.
Q And did you and Phil put that list together for
everything you needed to accomplish when you were making
the move from California to Nevada?
A Yeah, we -- we did. We took a look at what we
had to do. You know, what was necessary to be done. It's
kind of an overwhelming task to move from one state to
another after you have lived in one state for a long time.
Q When did you put that list together?
A I don't remember. We talked about things for a
while.
Q Now, you go to Nevada at the end of February.
You rent an apartment, and there's a flurry of activity;
correct?
A Yes.
Q Why did you do everything that you did that
weekend then? Why didn't you wait until you had purchased
a house first?
A Well, I think Phil talked about that. We wanted
to make sure that we found the place that we really wanted
in the area we really wanted. And that took time to
become a much better acquainted with the area than we
were.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 155
Q Well, you said you went to a bunch of open houses
and were looking at real estate. What did you do in that
regard?
A I guess I'm not understanding.
Q I want to slow you down. I want to slow you
down.
A Okay.
Q You rent the apartment, and it's time to go look
for a house; right?
A Right.
Q What did you do?
A What did I do?
Q Yeah.
A Well, we were looking online. We were reading in
the newspapers looking for open houses, lots of different
things.
Q Okay. Can you approximate how many open houses
you went to starting on the 1st of March 2008 to go look
for a house?
A Gee, I probably looked at seven or eight. And
when we were going to the auction, the auction would give
you a list of houses to look at that were going up on the
auction block. And then I ran around town looking on all
MLS houses too.
Q Now, eventually, you hired a broker?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 156
A Correct. At one of the open houses I met a
broker. Yes.
Q I think I heard you say that you met that broker
at an open house?
A Correct.
Q And did that broker then take you to other open
houses?
A He scheduled appointments for Phil and I to look
at houses.
Q And did you do that?
A Yes.
Q We heard from the questioning of Phil that you
spent a substantial amount of time out of Nevada, either
in California or Montana or Arizona, between March and the
time you bought the house. Was that about -- was what
Phil described in that regard pretty accurate?
A I spent more time in Nevada than he did,
probably.
Q And when you're outside of Nevada, when you
couldn't physically go see houses, did you do anything to
continue to look for a place to live between March and
September?
A Well, gee, it's quite a while ago. I think -- I
think our realtor would send us some -- some that we --
that he thought might work for us. You know, he would
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 157
send some pictures and stuff like that, I guess. Jim did.
I know that he, with the house we bought, he called us and
said, "I got a house I think you guys would love," and we
weren't in town. We were in Montana.
MR. BRACAMONTE: We were in Montana. We never
looked at.
MR. MARKOW:
Q You mean the house that you've lived in for the
12 years you bought sight unseen?
A Yes.
MR. BRACAMONTE: We were -- we were sort of
burned out from looking at houses and lot of frustration.
MRS. BRACAMONTE: A lot of frustration. A lot
of, you know, disappointments too 'cause we made -- we
made -- we bid on a few houses.
BY MR. MARKOW:
Q I think I heard there was some discussion of
while you had the apartment that there are somewhere in
your charges, charges for hotels in Henderson. Did I hear
that correctly?
A Yes, there were.
MR. BRACAMONTE: Yeah.
MRS. BRACAMONTE: There were. I know that I put
my dad -- okay.
BY MR. MARKOW:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 158
Q What was the reason for that?
A I -- I would bring my dad to be with me.
Q And so did you ever stay in a hotel in Henderson
while you had the apartment?
A I don't -- I don't believe so. I think most of
those charges were for my father.
Q And he would also go out with you to look at
houses?
A Yes.
Q Give me one second.
A Okay. Okay. Can I retract something I said?
Q If it's inaccurate, please do?
A Yes. I remember one time that Phil and I stayed
in a hotel in -- after the sale of Jimsair. It was a
celebratory stay at the Green Valley Hotel.
MR. BRACAMONTE: Yeah, that's right. That's
right.
MRS. BRACAMONTE: So I want to clarify that.
BY MR. MARKOW:
Q But that was after the Jimsair sale?
A Yes.
Q Now, speaking of the Jimsair sale, when was the
first time you heard about Jimsair being sold?
A Well, when Phil told me that Landmark was looking
to buy it.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 159
Q And when was that?
A I can't give you an exact date.
Q Was it before or after you had rented an
apartment in Nevada?
A Oh, well after.
Q When if -- and I'm going to make you do it. If I
were to make you say on what day did you move from
California to Nevada, what day was it?
A I would say February 26th Nevada became my home.
Q And you've been living in Nevada ever since then?
A Yes, and I love it.
MR. MARKOW: Well, as I said, I was going to try
to be much shorter with this witness, and I am finished.
Thank you.
JUDGE TAY: Thank you, Mr. Markow, and thank you,
Ms. Bracamonte, as well.
I'm going to hand it over to Mr. Hofsdal for any
questions FTB might have of the witness.
Mr. Hofsdal, I believe you're still muted.
MR. MARKOW: Ron, you're muted.
MR. HOFSDAL: Can you hear me?
JUDGE TAY: Yes.
MR. HOFSDAL: I think I'll be fairly short as
well.
///
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 160
CROSS-EXAMINATION
BY MR. HOFSDAL:
Q I'm a little confused about the physical presence
of both you and your husband, you know. And you both
provided Exhibit F, which reflects, you know, you all's
physical presence in Nevada, California, Arizona, and
elsewhere. So on the days that are indicated as Nevada
days, is it true that some of those days you're in Nevada,
but your husband was not?
A On the days that are indicating Nevada?
Q Yeah.
A No. I would say some of the days that he might
have been in California I was in Nevada.
Q Nevada. No. If you look at Exhibit F, remember
you all put together in response to our questions a basic
understanding of -- of pages 4, 5 and 6?
A Let me see. Again, what are you asking me?
Q No. I'm just a little confused because you all
compiled, based off your charts, this list of days you
were in different places.
A I can only tell you this, that are days that --
that he probably indicated California, and I might have
still been in Nevada.
Q So who prepared this calendar?
A Who prepared the calendar?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 161
MR. BRACAMONTE: Oh, the breakdown? I did.
BY MR. HOFSDAL:
Q You did. Okay. Now, I want to just take a
moment about -- I just want to talk for a moment about the
list that your husband that had provided. I mean, and you
know how he accumulated the different tasks of things that
you all needed to do to make this move?
A When I moved from Michigan to California, I had
to do all those things, like, change my driver's license,
you know, reregister my car, do things like that.
Q Yeah.
A And I would imagine that together we kind of came
up with this strategy that we talked about.
Q Okay. And whereabouts did you come from Michigan
to California?
A Let's see I came in 1969.
Q Okay. 1969. Did you come for school?
A No. I had -- I graduated from college.
Q Great. All right, now I want to talk a little
bit about this Verizon thing. I know that one of the
judges, you know, asked you questions about it, you know.
And, you know, the amounts -- and we can go through each
month if you want -- but the month of the charges range
from, like, $139 to $197 for the whole month of December.
I mean, that would indicate to me that there was more than
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 162
just one user. Before you got your Nevada cell phone, did
you ever have a California cell phone?
A Yes. Uh-huh.
Q And was that services with Verizon?
A I do not remember who the service was.
MR. BRACAMONTE: I thought it was AT&T, but I
don't recall.
BY MR. HOFSDAL:
Q Okay. All right. Now, as far as the apartment
goes, now it's my understanding that you all essentially
took what you traveled with and, essentially, appointed
you're apartment in those things. I mean, how would you
describe the inside of your apartment during the time at
issue here?
A How would I describe it?
Q Yeah. Did you have picture on the wall? Did you
have plants? Did you have a headboard? Did you have, you
know, and that kind of stuff. I mean, how would you
describe the interior of your apartment at this time?
A Well, it was comfortable, but it was pretty
utilitarian.
Q Now, every family, especially, the mom and
daughters and the like, and they always have things that
they kind of consider to be -- for a lack of a better
expression -- kind of, like, near and dear to them. It
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 163
could be a momento. It could be a vase. It could be a
number of things. Did you have any of those near and dear
types of possessions in Nevada while you were in the
apartment?
A Not while I was in the apartment, no. I kept
many near and dear things in Havasu.
Q Okay. In Havasu. Okay. Now, the near and dear
things you did have in Escondido, they remained in
Escondido until what time?
A Oh, gee. Well, some we took out early and took
to Havasu to be transported later to a permanent house
here. And some that we could put in safes we put in
safes.
Q Okay. Fair enough. Now, with regards to the
PO Boxes, you know, I voiced a little bit of skepticism.
I just want to get clarification on you. You know, you
all had the PO Box in Nevada. And then you had these
large periods of time and -- and it's my understanding
that the PO Box center, the post center, whatever it was
called, is essentially across the street from the
apartment; is that true?
A It was down the street, yes. It wasn't across.
Q It was pretty convenient; right?
A It was.
Q Yeah. And you had the ability to receive mail at
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 164
your apartment as well; true?
A No. I probably never opened the mailbox at the
apartment.
Q No. Had the ability to and you had a mailbox key
and that kind of thing at the apartment; true?
A I don't think we ever picked --
MR. BRACAMONTE: I don't -- I don't think we ever
got a key.
MRS. BRACAMONTE: I don't think I ever signed out
for a key.
BY MR. HOFSDAL:
Q Okay. So then do you recall ever doing a change
of address in order to have mail that might be important
to you forwarded to California during these long periods
of time when -- when you all were out of Nevada and in
California?
A Forwarded to California, no.
Q No. Okay. Now, can you think of any document
that may have gone to your Nevada address that you would
consider to be so important that you would have to see it
within a 30 or 40-day period? In other words, was the
type of mail that was sent to that PO Box, was that the
type of mail that could sit for a period of time?
A Most important mail, you know, our bills and
what-have-you, we pay -- we had everything taken out of
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 165
our checking account.
MR. BRACAMONTE: Some stuff.
MRS. BRACAMONTE: Yeah. Phil took care of most
of the bills.
BY MR. HOFSDAL:
Q So, basically, what I'm trying to get to is,
basically, the mail that went to the PO Box was really
mail that wasn't significant or all that important because
you had direct deposits, and you had the ability to look
things up online. It was nothing vital. You weren't
expecting like a social security check or something look
that needed to be deposited; true?
A True. For the most part that's how I remember
it.
Q Okay. All right. Now, and your husband was
talking earlier about -- about the doctors and Medi-Care
and medical treatment and stuff like that. And he was
under the belief that you all changed your primary care
and physician after the purchase of the home in Henderson.
Is that fair to say?
A That's fair to say.
Q Okay. Now, in talking to Phil for quite a while,
it seems pretty clear that a lot of things, like, the
medical care and different things, you all were just kind
of like almost kind of holding back or waiting to have a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 166
more permanent address -- for lack of a better thing -- in
order to establish things like doctors and the like. Is
that fair to say?
A Well, yeah. Basically, I guess.
Q Now, how far of a drive is it from -- from your
home or the apartment in Henderson to Lake Havasu?
A About 2 hours and 15 minutes.
Q Okay. And it's my understanding that you all own
what, two properties in Lake Havasu and two, is it like,
storage facilities or something? I mean, I couldn't quite
make out from --
A We own a 80-foot facility.
MR. BRACAMONTE: We had the condo.
MRS. BRACAMONTE: And we had the condo.
BY MR. HOFSDAL:
Q Condo. Right. So it was two homes and two
storage facilities or one storage facility?
A One storage facility, 80-foot long.
Q Right. And they were purchased years before the
whole Jimsair thing is my understanding; true?
A Yes.
MR. MARKOW: You mean the sale?
MR. HOFSDAL: Yeah.
BY MR. HOFSDAL:
Q And you acquired the Lake Havasu property years
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 167
before the Jimsair sale, probably like --
A We bought it in 2003.
Q 2003. Yeah. Now, what kind of stuff did you all
actually store in this 80-foot warehouse?
A Well, sometimes the motor home would go in there.
We would have a boat in there.
MR. BRACAMONTE: It was 80 feet long, 13 feet
wide.
BY MR. HOFSDAL:
Q And then Jim was also talking about, at times,
the motor home. And it's my understanding that you owned
two motor homes at the time, but that those were -- I
don't know if you stored or at in Indio, California. What
exactly property do you own, or how was it that the motor
homes found their way to Indio?
A Well, we only owned one motor home.
Q Okay.
MRS. BRACAMONTE: Did we own more than one?
MR. BRACAMONTE: For a time we owned the Dynasty,
which John took.
MRS. BRACAMONTE: Oh, okay. Yeah. I'm sorry.
Our son had a motor home that we owned. We had a lot at
MCC.
BY MR. HOFSDAL:
Q And what is MCC? I'm not --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 168
A Motor Coach Country Club.
Q Oh, okay. So it was my understanding that maybe
you had, like, more than one lot during this time. Is
that fair to say?
A Yes.
Q Okay. And that Jimsair also owned a couple of
lots besides the ones you did; true?
A True.
Q And were they all in the same complex -- for lack
of a better word. I'm not quite sure how to describe it.
A Yes. Yes, they were.
Q Yes. Okay. Now, was it just like a mobile home
park like you would, you know, like a double-wide type of
thing? Or is it more for -- for homes that, you know,
like motor homes?
A It was for class A motor homes only.
Q Okay. So what did you do with the lots that were
essentially vacant? Or did you have -- let me back up.
You got two motor homes during this time; one, that you
attribute or loan to your son. Were both of those at
those Indio sites?
A Yes.
Q Yes.
A For different periods of time, yes.
Q Yeah. And -- and --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 169
A I think my son had his there probably a little
more permanently than we had ours there.
Q So during the time frame we're looking at here in
early to mid-2008, do you recall having that motor home in
India -- Indio. Sorry.
A We were doing a lot of traveling, so probably it
was someplace else. We -- we were traveling. We were
doing some traveling during that time. And so --
MR. BRACAMONTE: Well, we were at Yellowstone or
Montana. Yeah. Yeah.
BY MR. HOFSDAL:
Q So safe to say, at least until you acquired the
home in Henderson -- and I Googled the house. I don't
know if you have. It's a beautiful home, but the driveway
is not very long. So I don't -- I mean, it's, for the most
part, the motor home is either at Lake Havasu or Indio; is
that correct?
A Probably, yes. Sometimes we would bring it. We
would stay at Oasis. We would have it over at Oasis RV
Park in Las Vegas.
Q All right. So you did have the mobile home in
Las Vegas?
A Yeah. We had to rent sites if we did that.
Q Okay. Yeah, yeah. But you did have the -- it's
a Monaco; right? You had a Monaco and a Dynasty?
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 170
A No. The Monaco was -- wasn't ours. Basically, I
considered it our son's.
Q Okay. All right. Okay. And then there were
times during 2008 when the mobile home was in Nevada?
A Oh, very short period, yeah.
Q Okay. And you never thought of getting that
registered in Nevada; right?
A No.
Q Now, in going through the records, it looks like
there were some accounts that were -- you know, you both
had access and you both had used them. But it seems like,
you know, some were directed for your use, and some was
more directed for your husband's use. Would that be a
correct characterization?
MR. BRACAMONTE: What was the question.
MRS. BRACAMONTE: Are the accounts more directed
for my use and more directed for your use.
MR. MARKOW: I didn't understand your question.
So maybe they don't either.
BY MR. HOFSDAL:
Q Okay. It's my understanding -- at least early on
in 2008 -- that there was some checking accounts or bank
accounts which I might attribute more to you and others
that I might attribute more to your husband. For example,
the First Future Bank account or the bank account you had
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 171
with First Future, you know, I kind of in my mind I kind
of attribute it more to you because that's -- and that's
where it seemed like your retirement income and the like
was in deposits.
A No. We both used it.
Q You both used it. Okay. Now, there was a -- in
that account there was a Jeep Cherokee you all had
financed. Whose car was that Jeep Cherokee?
MR. BRACAMONTE: That was a tow vehicle that
pulled our motor home.
MRS. BRACAMONTE: It was ours.
MR. BRACAMONTE: It was ours.
BY MR. HOFSDAL:
Q Yeah. Okay. So in 2008 when you were traveling
around or traveling about and you were in your motor home
and you didn't have the Harleys and you didn't have the
trailer, I guess, and you were towing that jeep; is that
correct?
A Yes.
Q Okay. And it's my understanding that, you know,
as soon as you sold Jimsair you basically paid that
balance off and basically all the balances on all the
accounts you all had. Is that your understanding?
MRS. BRACAMONTE: You'd have to answer that.
MR. BRACAMONTE: Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 172
BY MR. HOFSDAL:
Q Yeah. Okay. Now, it's my understanding
you're -- I see you get the -- you're a retired teacher?
A Yes. I was a retired administer.
Q Okay. And what year did you retire?
A 2001. September 2001.
Q Great. All right. I'm just going through my
note here. That might be all I have here.
So when you sold Jimsair and you had talked
about, you know, you and your husband had stayed at the
Green Valley ranch to celebrate the sale of that property.
Now, did you travel from California and check into the
hotel?
A No. We were -- no. We were in Nevada. We were
in Nevada.
MR. BRACAMONTE: Yeah, we were in Nevada.
MRS. BRACAMONTE: We were in the apartment. We
just decided we wanted to go to a hotel.
BY MR. HOFSDAL:
Q Hotel. Okay. Now, on those two documents -- and
this will be the last thing I'll be talking about. In
those documents that you all had executed on June 2nd and
June 11th. You know, I believe it's -- it's exhibits --
what is it? Exhibits 14. And I'm looking at the -- I'm
looking at the first page of Exhibit 14 now. Do you see
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 173
that?
A Yes.
Q Okay. Now, we talked earlier with your husband
about, you know, where you both were or, you know, up --
leading up to the execution of these documents. And do
you recall signing these documents, either one?
A Do I recall signing them?
Q Yeah. I mean, do you have --
A Well, it's my signature, but I don't recall it.
No.
Q You don't recall. Yeah. Now, it's kind of
curious for a number of reasons. One, is at least -- I'm
looking at the first one now that was executed on 6/2.
Just looking at the witness statement and the notary, now,
you know, I'm a little bit familiar with, like,
requirements and what a notary has to do or not to do and
that kind of thing.
And, you know, basically, when you're looking at
a language that's required on a notarized document that
says, "State of Nevada County of Clark, this instrument
was acknowledged before me on a date by so and so and so
and so," right. But here we just have "witnessed" and the
stamp. So what exactly is she witnessing here? And
that's my --
A I can't tell you. I'm sorry. I don't know.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 174
Q Yeah.
A She's witnessing our signature. That's all I can
say.
Q And the other thing is -- it's curious because,
you know, it looks like this document is calling on you
and your husband to sign this document and have it
witnessed. But Mr. Baccarro [sic] has no such
requirement. Do you have any understanding as to why your
signature had to be witnessed and his did not?
A Well --
MR. BRACAMONTE: He probably would have signed
one of these but a separate --
MRS. BRACAMONTE: Separate one of those
documents.
MR. BRACAMONTE: Yes.
BY MR. HOFSDAL:
Q And then if you look at the top of this document
there's a fax stamp, right. And what this typically means
is that this is, you know, a fax, and that came from Luce
Forward, which is, from my understanding, was your law
firm who was representing you at the time. And it's only
pages -- two pages long. And I'm assuming the first page
is -- is the cover page. Most law firms always have a
cover page. And the second page is just this -- is just
this signature page. So is it your understanding that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 175
your law firm in San Diego simply faxed you a signature
page for you to execute?
A Well, I.
MR. BRACAMONTE: Yea, we probably already had the
main documents. So it was just the signature pages.
BY MR. HOFSDAL:
Q Okay. So the question is, you know, if you
already had the underlying documents and you just had to
sign the signature pages, why didn't you just sign the
document, you know, like when you picked up -- when you
picked it up from your law firm where they have the
notaries and all that kind of thing?
MRS. BRACAMONTE: We got the documents.
MR. BRACAMONTE: Yeah. I can't tell you right
now. But, obviously, they were not in our possession when
we signed this.
MR. HOFSDAL: Okay.
MRS. BRACAMONTE: I wonder if they faxed or
overnighted them to us or --
MR. BRACAMONTE: I don't know either.
BY MR. HOFSDAL:
Q So do you know what document this was attached
to? Because the only thing --
MR. BRACAMONTE: Probably the purchase agreement.
BY MR. HOFSDAL:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 176
Q Purchase agreement. Okay. So it was a lengthy
document; true?
MR. BRACAMONTE: What's that.
MR. HOFSDAL: It was a lengthy document that was
attached to this?
MRS. BRACAMONTE: A lengthy document.
MR. BRACAMONTE: Well, this is part a lengthy
document these signature pages, yes.
MR. HOFSDAL: Okay. All right. So do you have
any understanding why you were just -- and do you have any
memory of reviewing, picking up this document to review it
before you received this two-page fax to sign.
MR. BRACAMONTE: I -- I don't recall, you know,
the -- what was it? You know, what transpired at the
time, why just these -- these signature pages. Obviously,
this is part -- all part of the main document.
MR. HOFSDAL: Yeah. It's just curious. I'm not
being argumentive or anything. But, you know, we've
established that, you know, through the morning of
June 2nd you were in California. You drive to Nevada.
You sign a signature page, and you don't have the
underlying document. It's just curious.
MR. BRACAMONTE: Well, the only thing I could say
is that maybe the final document wasn't ready, and we had
already left town and just the signature pages were sent
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 177
over and returned.
MR. HOFSDAL: And then on the next page -- it's
just two more documents that we're going over. It's kind
of the same -- it's kind of the same thing with regards to
the witness and, you know, like what's he witnessing. I
mean, do you have any indication of who this guy even is?
He's not even a notary or anything. Is he a friend or --
MR. BRACAMONTE: I don't -- I don't know who it
is. Probably at the -- wherever this was faxed to, we
probably used the notary or -- that was on duty.
MR. HOFSDAL: Yeah. And I guess that's my next
question. You know, unlike the document before that has
the fax indicator on the top, this document does not have
that. And I was wondering, do you recall getting this
faxed, or is this something you may have picked up at your
attorney's office and brought to Nevada in order to sign?
MR. BRACAMONTE: Yeah. This is not Nevada's.
The first -- the first document has a Nevada stamp. And
the second document, of course, there's no stamp. But --
MRS. BRACAMONTE: It was signed in Henderson,
Nevada.
MR. HOFSDAL: Signed in Henderson, Nevada.
MR. BRACAMONTE: Oh, it probably went to the out
box --
MRS. BRACAMONTE: Outpost.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 178
MR. BRACAMONTE: Outpost mailbox where we had out
mail.
MR. HOFSDAL: Yeah. And do you ever recall, with
regards to executing any of these documents relating to
the sale of Jimsair, that you received anything more than
perhaps a cover page and the lines to sign?
MRS. BRACAMONTE: We probably received -- we
received a lot of documentation.
MR. BRACAMONTE: Yeah. I know we signed some up
when we were up in Yellowstone. Yeah. I don't remember
which document it was.
MR. HOFSDAL: Yeah. I don't mean to confuse you.
I'm just talking about when you got this page to sign via
fax in Henderson at the post boxes, was it just this page
and perhaps a cover page? Or did the fax include 39 or
40-page document?
MR. BRACAMONTE: Well, I'm just -- I don't
remember how many pages. But this, you know, just looking
at the top of it looks like just two pages on the first
one. The second one -- again, I don't know about the
second one.
MR. HOFSDAL:
Q Now, if you flip to the next page or the next
exhibit, like, 15, 2, and 3. Now, in Mr. Bracamonte's
declaration -- and I believe in one of the briefs -- there
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 179
was an indication that the family trust was modified
sometime in late June or early in July. Do you have any
recollection or memory of the trust being amended prior to
the sale of Jimsair?
MR. BRACAMONTE: Yes. That's one of the first
things we did when we arrived here in Nevada. An attorney
was recommended to us, a trust attorney. And we took her
trust agreement to him and -- to find out what we needed
to do to amend it.
MRS. BRACAMONTE: Because we know we were going
to look for a house, and we wanted to place it in a trust.
MR. HOFSDAL: Sure. Yeah. I kind of -- so is
the purpose of amending the trust to purchase the house
and put the house in the trust?
MR. BRACAMONTE: Yes.
MR. HOFSDAL: Yeah. And the reason why I ask is
that the dates -- and there's no documentation to support
when the trust was actually amended. But when you look at
this signature page here, Exhibit 15-2, it has a date of
July 18th, which is the sale of the Jimsair. Do you see
that?
MR. BRACAMONTE: Yeah. The signature page?
MR. HOFSDAL: Yeah. You see the signature page
there? And you see where it has the date of July 18th?
MR. BRACAMONTE: Yes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 180
MR. HOFSDAL: Okay. And when you look -- you
know, you and your wife are -- both of you are signing it,
but you're not signing it on behalf of the amended trust.
You're signing it on behalf of the -- the California.
MR. BRACAMONTE: The date in the trust did not
change. All they did is put an addendum section in the
back of the trust.
MR. HOFSDAL: Right. But typically when a trust
is amended, it's referring to, you know, trust date blah,
blah, blah, as amended on so-and-so. So I'm asking is, is
there any possibility that the trust was amended after
July 18th?
MR. BRACAMONTE: No.
MR. HOFSDAL: And this is the other possibility.
Is there any possibility that you signed this document and
then somebody later put the date in?
MR. BRACAMONTE: Put the date?
MR. HOFSDAL: Yeah. In other words, you
pre-signed it; maybe signed it before the -- before the
trust was amended. And then when you needed to execute
it, somebody other than you or your wife put 18 in that
slot.
MR. BRACAMONTE: We -- this date has always been
used on the trust, even after it was amended. You know, I
can't tell you why, but the same date is still on the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 181
cover of the trust.
MR. HOFSDAL: So that's not my question. And my
question is, is it a possibility that perhaps you may have
pre-signed these documents or this document, and somebody
later inserted that July 18th in it?
MRS. BRACAMONTE: No.
MR. BRACAMONTE: July 18 is the closing date.
MR. HOFSDAL: Yeah. I know. I know. But I
certainly understand that. But is it possible that this
document may have been executed by you and your wife prior
to 18th, and then on the 18th somebody put the 18th in
there?
MR. BRACAMONTE: Well, it looks like this guy
that the -- the president of Landmark might have put the
date there.
MR. HOFSDAL: Yeah. Because the curious thing
is, is that the 18 on both the one signed by you and the
one signed by the president, it looks like it is the same
18. That's why I'm just asking.
MR. BRACAMONTE: Well, they look a little
different. Yeah.
BY MR. HOFSDAL:
Q Now, Mrs. Bracamonte, what was your understanding
of the dispute between Jimsair and the Airport Authority?
MR. BRACAMONTE: Well, the dispute was about --
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 182
MR. HOFSDAL: No. I'm sorry, sir. I was asking
your wife.
MR. MARKOW: Phil, you don't get to answer every
question.
MR. BRACAMONTE: Well, my only understanding was
that it was over the lease. And that's my understanding
right or wrong.
BY MR. HOFSDAL:
Q Okay. And what was your understanding of when
that lease was going to expire?
A Gee, I think it was four-and-a-half years left on
the lease when we moved to Nevada.
Q I'm looking for one more document here as we're
talking. Just give me one second. I think we're wrapping
up here. So as I'm looking, isn't it true that both you
and your husband voted in California in February 2008?
A I don't remember that. I don't remember. I'm
sorry. I don't remember.
Q Okay. As we're closing out here, let's just take
a quick look if I could find it. If you'll go to
Exhibit N?
A Exhibit N.
Q The first line, presidential primary on
February 5th, 2008?
A 2005 is the presidential primary.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 183
Q I believe yours is the second one.
A Oh.
Q Do you have any memory of that California
election in February 2008?
A No. I'm sorry. I don't have any memory of that.
Q In that exhibit I showed you, does that refresh
your memory in any way?
A Well, I can see the exhibit. It doesn't
necessarily -- I still have no recollection of it.
MR. HOFSDAL: That's all I have, ma'am. Thank
you very much.
MRS. BRACAMONTE: Thank you.
JUDGE TAY: Thank you, Mr. Hofsdal. And thank
you, again, Ms. Bracamonte.
I just want to turn to my panelist to see if they
have any questions for the witness. So first to
Judge Johnson.
JUDGE JOHNSON: Judge Johnson. No questions.
Thank you.
JUDGE TAY: Thank you, Judge Johnson.
Judge Le, any questions?
JUDGE LE: This is Judge Le. No questions.
JUDGE TAY: Thank you. This is Judge Tay.
Thank you very much, Ms. Bracamonte.
I'm going to turn it back to Mr. Markow to finish
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 184
up his presentation. If he needs any more time to do
that, just a reminder, Mr. Markow, you do have 30 minutes
after FTB's presentation to make a rebuttal and a closing
statement.
MR. MARKOW: Well, Your Honor --
JUDGE TAY: And so --
MR. MARKOW: I'm sorry.
JUDGE TAY: Go ahead.
MR. MARKOW: Your Honor, it would seem to me that
the way we would prefer to proceed at this time is my --
what is left for me is a discussion of an application of
what we have just heard from the witnesses and seen in the
documents to the relevant law. I would characterize that
portion of my presentation as the close. And so I don't
have a presentation and then a closing.
I have got one more piece to do, which is to
discuss this and then the legal standards and how the
facts we just learned apply to them. So I don't know
whether you want to go into closings now or how you want
to proceed in that.
JUDGE TAY: Thank you. This is Judge Tay. Thank
you for clarifying that, Mr. Markow. In that case, I'm
going to turn it over to FTB to make their presentation.
And then, Mr. Markow, I will give you time at the end for
all the things you would like to include in your closing
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 185
as well as any rebuttal to what Franchise Tax Board
presented.
MR. MARKOW: Sounds good.
JUDGE TAY: Okay. Mr. Hofsdal, I turn it over to
you. I'd like to limit you a little bit to an hour and a
half.
MR. HOFSDAL: I don't think I'll be anywhere near
that. So I think we're in good shape.
JUDGE TAY: I appreciate that. So I would turn
it over to you.
MR. HOFSDAL: I was going to keep it to -- so
yeah.
JUDGE TAY: Please, before you go into it, I
think for our court reporter's sake I will -- I might
interrupt you in the middle of it to request a five-minute
break for her. But please proceed whenever you're ready.
MR. HOFSDAL: I mean, I would suggest then
that -- I don't know. I don't think I'll be a half hour,
and Mr. Markow said that he doesn't think he'll -- you
know, he has a half hour. So it might be good time
instead of stopping in the middle that we go ahead and
just take a break now. I think we, you know, we'll be
able to finish well within an hour. Does that sound fair?
MR. MARKOW: I -- my closing would be if I were
to -- it's somewhere between 15 and 20 minutes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 186
JUDGE TAY: Okay. Why don't we take a
five-minute break now. Come back at 4:35. Please, just
as a friendly reminder, to turn off your camera and mute
your mic. We will reconvene at 4:35.
(There is a pause in the proceedings.)
JUDGE TAY: I'd like to go back on the record
now, and I will turn it over to Franchise Tax Board to
make their presentation.
Franchise Tax Board, whenever you're ready.
MR. HOFSDAL: Great. Thanks. As I suggested in
my opening statement, we're going to start the argument
section here with Ms. Macedo talking about the penalty,
and then I'll talk about the residency law.
Desiree.
CLOSING STATEMENT
MS. MACEDO: Good afternoon.
This panel should affirm Respondent's
determination as to the delinquent filing penalty because
Respondent properly impose the penalty under California
law for the 2009 taxable year. The Appellants have not
established grounds to abate the penalty.
Pursuant to Revenue & Taxation Code Section
19131, a delinquent filing penalty is imposed if the
taxpayer does not file a tax return by the due date of the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 187
return, unless the taxpayer demonstrates its failure to
timely file is a result of reasonable cause and not
willful neglect. This penalty is mandatory, and
Respondent does not have discretion in its application.
In the present appeal, Respondent properly impose
a delinquent filing penalty because Appellants never filed
a 2009 income tax return, although, they received income
attributable to California during the 2009 taxable year.
Appellants do not dispute the delinquent filing penalty in
either of their briefs. Rather, Appellants allege the
penalty should be abated due to reasonable cause.
Appellants bear the burden of proving existence of
reasonable cause in order to support the abatement.
In order to show reasonable cause, the taxpayer
must show the failure to file return occurred despite the
exercise of ordinary business care and prudence.
Appellants assert that the delinquent filing penalty
should be abated because they relied upon the advice of
their tax preparer. To prove that a taxpayer relied upon
professional advice, the taxpayer must establish by a
preponderance of the evidence the following three
elements:
One, the adviser was a competent professional who
had sufficient expertise to justify reliance.
Two, the taxpayer provided necessary and accurate
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 188
information to the adviser.
And three, the taxpayer actually relied in good
faith on the tax professional's judgment.
Appellants have not provided any evidence to
establish that one, they relied on the advice of a
competent tax professional who had sufficient expertise in
California residency law to justify reliance; two,
Appellants arrived all necessary and accurate information
to the tax professional; and three, Appellants actually
relied in good faith on their tax professional's judgment.
Since Appellants have not provided credible and
competent evidence to support their claim of reasonable
cause, the penalties cannot be abated based on the
relevant case law, facts, and evidence in the record.
Respondent respectfully request you sustain its position.
Thank you.
And I'll defer to Hofsdal for our residency
argument.
MR. HOFSDAL: Thank you, Desiree.
JUDGE TAY: Thank you. I apologize.
Mr. Hofsdal, before you continue, might I ask all those
participants who are not speaking, if you would please
mute your mics. We would appreciate it. Thank you very
much.
Sorry, Mr. Hofsdal. Please go ahead.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 189
MR. HOFSDAL: Sure. Absolutely.
Under California Revenue & Tax Code Section
17014(a), a California resident includes one, every
individual was in the state for other than a temporary or
transitory purpose; and two, every individual domiciled in
the state who is outside of the state for a temporary or
transitory purpose. Thus, the determination of the
Appellants residency is essentially a two-part test that
starts with determining Appellants' domicile and concludes
with weighing factors to determine whether the Appellant
was inside or outside of California, depending on their
domicile for a temporary or transitory purpose.
At the prehearing conference, the parties were
asked to apply the recent Office of Tax Appeal decision in
Mazer to the facts here. As I stated above, Respondent
agrees that the first inquiry is domicile. As defined in
Whittell v Franchise Tax Board, a change in domicile
requires both physical presence in a particular locality
and an intent to make it the individual's one permanent
abode. In other words, in determining whether a taxpayer
changed his or both domicile, both intent in physical
presence must simultaneously occur.
And significantly, as pointed out in Mazer, a
taxpayer's own actions must support a change of domicile.
Unsubstantiated statements will not suffice. It's best
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 190
summed up in the Appeal of Tarola as cited by the
Appellants in their briefs. The Appellant's intention
must be marked by objective facts demonstrating that the
nominal residence has actually become the essential point
of his interest and attachment. And I think that's the
key here, the central point of its interest and
attachment.
Here it is clear. Appellants' actions reflect
that they maintained their California domicile well up
until late September 2008 when they purchased their Nevada
home. First, they seldom were in Nevada as compared to
their presence in California. And second, as demonstrated
in Mr. Bracamonte's declaration in the taxpayers' briefs,
the Appellants' presence in California was not only by
choice -- some 89 days they say -- but to be with family,
including birthdays, grandparent duties, or business
related and either related to the ongoing lawsuits or the
operation of Jimsair.
Intent aside, taxpayers clearly did not
demonstrate the requisite amount of physical presence
consistent with the change of domicile prior to
September 2008. The days the Appellants were physically
present in California far exceeded the amount of days the
Appellants were in Nevada. And the length of continuous
presence in California, in two cases up to 18 days, is
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 191
consistent with a California home and domicile.
On the other hand, Appellants continuous days in
Nevada, which averaged about two days per stay, and for
some periods they were outside of Nevada for more than a
month, reflects at best, nothing more than a transient
presence in Nevada. And during the Appellants' presence
in Nevada and California during the fourth quarter of 2008
to the to the first three-quarters is quite revealing.
Desiree, can you please insert the color chart
that we --
Again, this is the color chart based on the
Bracamontes' physical presence from their own recollection
as reflected in Exhibit B. Again, red represents their
presence in California, and green represents their
presence in Nevada.
Desiree, can you now insert the fourth quarter
chart?
MS. MACEDO: I'm sorry I don't know why it's
not -- it is one document, and it's not letting me. It's
only showing the first page.
MR. HOFSDAL: Do you see it? Or are you able to
get or not? We can -- here we go.
(Wherein a chart is displayed onscreen.)
Now, this is the Bracamontes' physical presence
starting in September 29, 2008, after -- after they sold
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 192
Jimsair, and after -- just a couple of days after they
purchased their Nevada home. In this quarter, the green
represents, like it did before, their presence in Nevada,
and the red represents their presence in California.
MR. HOFSDAL: And then Desiree can you do the
whole year?
And here's the physical presence chart for the
whole year. As you can see, there's a clear line of
demarcation. The Appellants' physical presence in Nevada
for the fourth quarter more aptly reflects the physical
presence contemplated by the cases, including Mazer,
Whittell, and Tarola changed domicile. Respondent also
agrees with Mazer that the analysis then shifts to whether
the taxpayer was either in California for a temporary or
transitory purpose or outside of California for a
temporary or transitory purpose.
As stated in Mazer, one of the key questions
under either A-1 or A-2, is whether the taxpayer's purpose
in entering or leaving California is temporary or
transitory in character. Respondent also agrees with
Mazer that the contacts and connections a taxpayer
maintains in California and other states are important
considerations in order to determine whether the
Appellants received the benefits and protections of
California in accord with other non-transitory
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 193
inhabitants. And here the connections reflect the
Appellants did, in fact, receive benefits and protections
in accord with other non-transitory inhabitants.
Specifically in this case, we talked ad nauseam
about the physical presence, the charts, are very telling.
As soon as Jimsair is sold, as soon as they take
possession of that home, the physical presence shifts.
What was red is now green and vice versa. And this you
have to remember, during this time as
Mr. and Mrs. Bracamonte testified, Mrs. Bracamonte's
father was still suffering from COPD. They still had
family.
They still have the two ongoing lawsuits -- or
excuse me. The one ongoing lawsuit with the Mexican
matter that the Bracamontes make much of to be a factor as
to why they're in California. But in this fourth quarter,
those things are still going on, and their physical
presence dramatically shifts.
Respondent also -- physical presence -- the
location and the size and the value of the taxpayers'
residential property. In reading the briefs, the one
concept that keeps coming over and over and over again
is -- or what appears is, is kind of this confusion as to
what the key date is. The key date here is July 18th
where the Bracamontes physically -- or were the
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 194
Bracamontes residents of California on this date when they
sold Jimsair. When we're evaluating the property that the
Bracamontes owned in California, which includes a
beautiful home, multiple lots for mobile homes, and the
like. You compare that to a one-bedroom
utilitarian-decorated apartment in Nevada. It's clear.
And while we don't disagree that the Bracamontes
subsequently purchased a home in Nevada with the proceeds
from the sale of Jimsair, the bottom line is that home was
acquired after the relevant time and period. Therefore,
when we're evaluating this factor, it's clear that it
favors California, the state wherein the taxpayer
maintains or owns business interest. Appellant husband is
president of Jimsair, and Appellant wife remained active
in the operations of the business. In fact, both husband
and wife received W-2's, which reflect wages earned while
employed by Jimsair.
As we pointed out before, Mr. Bracamonte's W-2
reflects income of $148,000. And as we were able to
demonstrate, he was paid roughly, you know, 6 or $7,000
twice a month up until the June period. The obvious
explanation is that he continued to receive those payments
similar throughout his ownership in the business.
Further, when you look at the closing of the
documents, the closing of the documents specifically
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 195
required both Mr. And Mrs. Bracamonte to resign from
Jimsair. And as he pointed out where the Bracamontes
attempt to make much of the fact that they stop collecting
wages, as I demonstrated, I think, I hope, it's clear that
Mr. Bracamonte continued to earn the wages well past that
date.
Further, when you look at Mr. Bracamonte's
declaration, the declaration reflects he's still very
active with Jimsair. First, he was communicating with
vendors, including the Jimsair fuel suppliers well after
February 28th. He was communicating with his vendors into
May. He was negotiating the sale throughout the phase.
So he was still active in the business through the sale of
the business.
You know, although, Mr. Bracamonte was a boy when
his father founded Jimsair in 1950 or '52, his business
interest lasted a significant period of time with Jimsair,
some 58 years. Because of that reason, because of his
long history with Jimsair, that favor -- or that factor
clearly favors California as well. It was clear. You
know, oftentimes I think, you know, we don't look at the
end of the period. We're just looking at, okay, this is a
six-month period. But the reality is July 18th marked the
end of a 58-year relationship that Mr. Bracamonte had with
Jimsair.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 196
The origination point of the taxpayers' checking
and credit card transaction; the taxpayers utilized their
bank cards, credit cards, and the like in place where they
were physically present. As the Appellants used their
bank cards on more days in California than Nevada during
the relevant time period, this factor favors California
their residency as well. And also, it's important, you
know, to note that, you know, the credit card
transactions, with exception of a day here or day there,
clearly supports Mr. and Mrs. Bracamonte's own account of
the days they were in California and the days that they
were in Nevada and the days that they were in Arizona.
DMV records. Appellants each applied for a
Nevada driver's license on February 27th, 2008. In doing
so, they used the postal service address as their mailing
address. While February 27th, 2008, is somewhat
noteworthy because the Appellants received their Nevada
driver's license on this date. It's somewhat more telling
that the Appellants did not receive or did not take
possession of a permanent abode in Nevada until eight days
after they both registered to vote and got their driver's
license.
There's cases, you can take judicial notice of
them. One is Presson v Presson 38 Nev. 203. There's the
Nevada Revised Statute 10.155, 483.141, 483.245. All
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 197
those spells one thing. The prerequisite to filing and
obtaining a driver's license is being a resident and
residency requires having possession of a permanent abode.
Nevada offers reciprocity. This is found in
Nevada Revised Statute 483.2452. This means that if a
person has a driver's license from a state like
California, all they have to do is forfeit their
California driver's license at the time application, and
they could avoid the testing that would otherwise apply.
Appellants merely took advantage of this reciprocity
program, and neither took a written test or a driver's
test.
Further, at the time the Appellants obtained a
Nevada driver's license, they did not register any of
their numerous vehicles in Nevada at this time, which was
required under Nevada law. And the statute requiring
Nevada residents to register when they get their driver's
license is NRS 482.385 Section 3. And as we've talked
about in various aspects of talking with Mr. Bracamonte
and Mrs. Bracamonte, they had the Chevy Avalanche in
Nevada. They had the Cadillac Escalade in Nevada. And
this was after -- after they took possession of it from
Jimsair.
Mrs. Bracamonte had testified that one of the
mobile homes was at the Oasis Mobile Home Park in Nevada.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 198
Mr. Bracamonte talked about the Excursion being in Nevada.
But none of these vehicles -- none of these vehicles were
registered concurrently with the Bracamontes obtaining
their driver's license as required under Nevada law.
Excluding vehicles they registered in Nevada, it
does not appear that Appellants -- excluding vehicles
registered in Arizona, it does not appear that Appellants
registered any vehicles in Nevada prior to the date of the
sale of Jimsair, except for the 2006 Chevy Avalanche,
which was registered some three months after they obtained
their California driver's license. In fact, the Avalanche
with the California license plate number and the Cadillac
with the California license plate number were both
identified on the Nevada apartment lease, dated
March 6, 2008.
On the other hand, valid automobile registrations
in California were held on at least three vehicles,
including the 2003 Jeep Grand Cherokee, which was one of
their tow vehicles, the 1998 Dodge Ram, which was smogged
in California on June 2008. And, although, there was some
testimony that perhaps this vehicle was not in operation,
there was also testimony that that Dodge Ram was, in fact,
used to tow the 28-foot trailer that the Bracamontes
purchased in Nevada, only to have a third party deliver to
Escondido for his use at that property.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 199
And, of course, the 2007 Escalade, which was
their newest, shiniest, and most luxurious of all of their
automobiles, which had a registration that was valid from
June 2008 to August 2009. Then at least 10 toys,
including boats, RVs, trailers, a dirt bike, a Harley
Davidson, which was purchased in June 2008, but at least
for a year after the purchase, was operated with a
Nevada -- or was operated with a California registration.
They were all registered in California at all relevant
times.
As mentioned by the Appellants in their letter
briefs, this factor can easily be manipulated. Little to
no weight should be given to the fact that they obtained a
Nevada driver's license because Appellants prematurely
applied for a driver's license and failed to comply with
the more burdensome requirements, such as registering to
vote, which as we know from the record, included two
inspections -- or a smog check an inspection and then the
registration of the vehicle.
In total the process from the time Mr. Bracamonte
started the process of registering his -- his Avalanche to
completing that process was 10 weeks. So either it was
burdensome, or the fact is, is that it was inconvenient
because the Bracamontes couldn't complete it any earlier
because they were, in fact, as Exhibit F reflects, because
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 200
they were in California. On the other hand, Appellants
continued to register the vast majority of their vehicles
in California during the relevant period. As such, this
factor favors California as their residency.
Voter registration. Appellants registered to
vote in Nevada on February 27th, 2008. Several days
before they had the right to occupy the apartment in
Nevada. As we talked about earlier under the DMV
sections, Nevada law is fairly specific. In order to
register to vote, one needs to possess a then current
permanent abode not a future permanent abode. Both used
the mailbox services. When they registered to vote, they
both used the mailbox service address, 205 North Stephanie
Street as their mailing address.
Both Appellant husband and Appellant wife voted
in Nevada for the first time on August 12, 2008.
Interestingly, despite alleging that they became
California nonresidents on January 1st, 2008. At least in
their tax return and their first brief, it's clear from
the record that the taxpayers both voted in San Diego
County on February 5th, 2008. Again, as suggested by
Appellants in their opening brief, little weight should be
given to this factor because it's quite easy to
manipulate.
In fact, this and the driver's license situation
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 201
above is exactly the situation that the court in Whittell,
at page 288, warns us about. That the fact that someone
votes or obtains a driver's license in many situations
simply reflects laxity on state officials to determine if
the applicant is truly qualified. And that's the warning
from Whittell at page 288. This being said, little weight
should be given to the fact that the Appellants registered
to vote in Nevada because Appellants registered to vote
prior to occupying a Nevada home. They used a post
service -- a postal service as their mailing address.
The location of the taxpayers' banks and savings
account: The Appellants did open a bank account in
Nevada. However, they continued to maintain their
California accounts as well. And, in fact, the primary
account where Jimsair's proceeds were ultimately settled
and where the taxpayer pulled the funds to pay their
Henderson home was not opened by the Appellants until
August 7, 2008; well after the sale of Jimsair. As such,
this factor is probably vest viewed as best neutral.
When viewed in the totality, the connections
gathered by Appellants during the time period at issue are
best described as connections made in anticipation of a
future move to Nevada. A move anticipated after the sale
of Jimsair. The case of Noble v Franchise Tax Board
generally stands for the proposition that while a taxpayer
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 202
may intend to move outside of California, if he continues
to receive the benefits and protections of California, the
taxpayer maintains -- or remains a California resident and
must contribute to its support.
In other words, the facts must demonstrate that
Appellants' residence in California, for purposes of the
California income tax had ended. As stated in Noble, an
individual may intend to move from California some point
in the future does not make that person a domiciliary or
resident of a place outside of California. Significantly,
the Noble court hold that no matter what the Nobles'
intention for the future were, as of the time income was
earned, they had not relinquished either their residence
in California or their California domicile.
Mr. Bracamonte, when he was testifying, said
something I wrote down, and I think that's key to applying
the facts here to -- to Noble. And I'm going to call that
a "Noble wrap up". He said -- when asked on direct
examination, he said -- he was asked, you know, "Why did
you spend so much time in California during this period of
time?"
And he said, "We had to wrap things up. We had
issues with Mrs. Bracamonte's father. We had issues with
Jimsair. We had ongoing lawsuits. We just had too many
things to wrap up in too short a time," which is
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 203
essentially what happened in Noble. And for that reason
Noble is very much a case that's on point.
In the Whittle case the issue is whether
Californians had given up their California residency when
they moved their domicile to Nevada. In applying
Section (a)(1) of the statute in relying mostly on the
Whittell's retention of their California connections,
especially their significant physical presence in
California, their California business interest and their
California home, the court found that the Whittells remain
California residence despite maintaining connections with
Nevada.
And this is a key point because as it's generally
known, a person can be a resident of more than one state.
And the fact that Mr. And Mrs. Bracamonte having a
checklist that Mr. Bracamonte formulated as to
establishing residency in Nevada, that's secondary to
whether or not they continued to keep their residency in
Nevada. A person can have one domicile. They can have
multiple residents across multiple states.
And I think that's a clear point I want to make
because while they're trying to do a lot to establish
residency in Nevada, the fact of the matter is, like the
Whittells in the Whittell case, they continued --
continued with their strong California connections,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 204
including business, home, and the big one here, physical
presence, which we all agree, I think, is somewhat
overwhelming.
Like the Whittle case, Mazer places emphasis on
significant connections, like, physical presence and home.
Not only was Appellants' California home frequently
occupied by Appellants, on the few days it was not
occupied by them, it was always available for their use.
Further, Appellants' physical presence is consistent with
California residency. Other connections as described
above were maintained at all the relevant times.
Guidance is also available in the regulation.
For example, Example 2 in the regulation closely resembles
the situation here during the relevant times, and the
result should be the same. And the length of time that
Mr. Bracamonte was associated with Jimsair, some 55 years,
and the length of the time that the lawsuits were taking
place in Mexico, which I believe was more than 10 years,
and the long ongoing dispute with the Airport Authority,
clearly reflect a purpose of being in California for a
long and indefinite period.
At the time of the sale of Jimsair, the
Appellants were residents of California. They maintained
significant California connections. Their physical
presence was overwhelming in California. They represented
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 205
to a federal court they were residents of California in
order to apply the California statute of limitations. And
this, I think, should be seriously considered. This a
pretty atypical connection, but Mr. Bracamonte through his
attorneys as I mentioned earlier, represented to the court
that he was a resident of San Diego during the relevant
time.
Appellants were clearly receiving the benefits
and protections of California and, thus, are subject to
the California personal income tax on all income earned
during the relevant time period.
Thank you.
JUDGE TAY: This is Judge Tay. Thank you,
Franchise Tax Board, for that presentation. I'm going to
open it up for to my panelist to see if they have any
clarifying questions for Franchise Tax Board.
First, Judge Johnson, any clarifying questions
for the Respondent?
JUDGE JOHNSON: Thank you, Judge Tay. This is
Judge Johnson. A clarifying question for Mr. Hofsdal. I
don't know if it's in your briefing, but is there a
certain date that FTB concede there was a change in
domicile?
MR. HOFSDAL: Yes. I believe that they assert
that there was a change of domicile on September 29th.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 206
When we put up the colored charts, that's actually the
first green day of the month of September. And I think
it's pretty clear when you look at the taxpayer's physical
presence during that time period by all that green, that
that's the type of physical presence that the decisions
with Whittell and the like con --
JUDGE JOHNSON: Okay.
MR. HOFSDAL: Yeah.
JUDGE JOHNSON: All right. Thank you. And then
actually for Ms. Macedo or either of you, for the 2008 tax
year Appellant did file a 540NR. For the 2009 year they
did not file a return. Do you know when Appellants were
first contacted regarding the 2008 or 2009 tax year? I
know there was a request for documents in December of
2011. I'm just curious and maybe it's an easier question,
do you know if they received anything prior to the due
date for the 2009 return?
MS. MACEDO: I'm not sure if that's in the
record. I don't know.
Mr. Hofsdal?
MR. HOFSDAL: I'm not aware of that date, but
we're more than able to find out for you when they were
first contacted and get back to you if you wish.
JUDGE JOHNSON: That's not a problem. I was just
wondering if you knew offhand. So we'll go with what's in
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 207
the record. That's fine. Thank you. That's all.
JUDGE TAY: Thank you, Judge Johnson.
Judge Le, any questions for Franchise Tax Board?
JUDGE LE: This is Judge Le. I have no
questions.
JUDGE TAY: Okay. Thank you, Judge Le. This is
Judge Tay.
I have no questions for Franchise Tax Board at
this time. I'd like to turn it over for Mr. Markow for
his final presentation and his rebuttal and his closing
statement.
CLOSING STATEMENT
MR. MARKOW: Thank you, Your Honor. And thanks
to the panel and counsel for a smooth and professional
hearing today. I appreciate it, and we appreciate
everyone's attention and professionalism.
As we started this case, we started this case
saying that the case presents an issue of when domicile
and residents changes. Obviously, that's what we're
talking about. I had said in opening that it was sometime
between December 31st, 2007, and December 31st, 2008. We
now know it's sometime between February 27th, 2008, and
September 29th, 2008. And those are sort of our load
starts for the position of accordance here.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 208
Domicile -- and counsel for the FTB ably
summarized the state of the law regarding domicile and
residency. I'm not going to repeat what he said. It's in
our briefs, and I believe he accurately summarized it.
But the conclusions are very different from the evidence.
We make very different conclusions than the FTB does. The
regulations -- and this is regulations sections 17014,
counsel for FTB's cited subdivision A, I'm going to
subdivision C, defining the idea of domicile.
And the use is perhaps older language, but it
says -- and this is a quote, "The place in which a man has
voluntarily fixed the habitation of himself and family not
for a mere special or limited purposes, but with a present
intention of making a permanent home."
Now, one of those things I don't want to get
confused about in this proceeding is whether the apartment
versus real property was a permanent home or not. The
issue here is whether the State of Nevada was a permanent
home, or California was a permanent home. And the
relative and permanence of the first place that the
Bracamontes lived in Nevada is completely irrelevant to
that. The question that we're trying to answer here is in
which state did they intend to make and made a permanent
home, and when was that.
The Franchise Tax Board appears to assume that
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 209
the ownership of real property makes that the case. It
does not. What makes that the case is the concurrence of
physical presence in a particular place with the intention
to make that your home. And this is another fine
distinction, and we'll get into the number days a little
bit later in my discussion. But this particular analysis
is not a day's analysis. It's literally, have you gone
there, have you moved there, and do you intend to stay
there for domicile not residence.
And I think all the evidence that we heard today
shows that. It shows there's been no contradictory
evidence that on the -- at the end of 2007, the
Bracamontes determined they were going to leave California
and move to Henderson, Nevada. There's no contradictory
evidence that says that in February they implemented that
plan. They went and rented a place. They didn't just
rent a place. They had a plan for moving. The testimony
was that they had created a list, as one would when faced
with all of the myriad of details when you move a house.
And they created this list, and they were working on how
are we going to move from California to Nevada.
And on February 25th, 26th, and 27th of 2008,
they began to implement that list with vigor. The
evidence was that they just not rented an apartment, but
they went and did a whole bunch of things that people do
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 210
when they move. Now, the FTB insinuated but never said,
oh, they must have gotten this list from an accountant or
a lawyer. But the evidence was -- and I asked them pretty
specifically, did you do that, and they said no. They're
not lawyers. They're not going to check legal tests.
They have their own list that they made of what it takes
to move, and they went about implementing that in February
of 2008.
So when with you add up all of the things that
they did between February 2008 and the sale of Jimsair,
the list is pretty substantial. They rented an apartment.
They obtained driver's licenses. They had signed a deal
with the landlord, but they couldn't get in for two more
days. And the State somehow seems to believe that that
means that the obtaining of the driver's licenses is
somehow tainted. It isn't. They not only got it, it was
never invalided. This is not a case involving Nevada
driver's license law or Nevada election law.
This is a case involving the things they did to
move to Nevada. So they got their driver's licenses.
They got their main vehicle, the Avalanche, registered.
They didn't own their other car until June. So they
didn't register it then. They registered to vote. They
opened up bank accounts. And these bank accounts turned
into their -- turned into their substantial bank accounts.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 211
What we heard was they opened these bank accounts in
Henderson. And later on having opened a bank account in
Henderson and having the Jimsair money come into that bank
account, Wells Fargo says, whoa, that's the wrong kind of
account for that kind of money. We need to move you to a
different account.
So when the Franchise Tax Board says, oh, it was
a brand-new account for Jimsair money, that's technically
true, but it's completely misleading. They had a Nevada
account and they simply moved from one Nevada account to
another Nevada account. So they had Nevada bank accounts
in February of 2008. They changed their address. They
obtained, as they did in California where they had post
office box, is they obtained a new post office box and
started to change all of the important addresses that they
had to go to Nevada and not California.
They dealt with their car insurance and changed
it over when they reregistered their cars. To a certain
degree but not a lot, they had some medical appointments.
They got cell phones. All of these things are the things
people do when they actually move. And what's interesting
is, is the FTB is kind of turning it on its head and
saying, oh, these things. These are super easy. We
shouldn't be looking at these things because they are
easily fraudulent. You can falsify these.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 212
It's kind of turning reality on its head. We're
dammed if we do, and we're dammed if we don't under that
theory. Under that theory, if we hadn't done it, they
would say, look, they didn't get all those things. If we
did it, they would say, look, they got all those things.
It's a total fake. It -- it doesn't work that way. It's,
you know, you can't have that both ways. And the reality
is those are the key things, the core things that people
do when they change places where they live, and they were
done at the end of February.
Which is not to say that the Bracamontes drew a
line in the sand, and it was a perfect move. Everything
happened then, and nothing happened thereafter. Life is
messier than that, and this move was messier than that.
They still had things they needed to do to effectuate the
move. But the question is when did it really happen? Is
it when the last thing happens? Or is it when the they
have evidence of their intention, as the law requires, to
actually move and stay indefinitely. And I will submit to
this panel that happened when they did all of the things
one does to move.
Now, what's really interesting here -- and this
is an important distinction with the Mazer case. The
Mazer case was interesting because the issue there was the
guy heads for Singapore, spends a year and a half there,
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 213
and then comes back. He didn't even stay in Singapore.
And so the question was, was he really there indefinitely?
Was he -- was he really there without the understanding
that he was coming back, or did he plan on coming back?
Or even if he didn't plan on it, he knew it wasn't
probable.
And what that court basically held was, yeah, he
left. But when he came back it was pretty clear that was
not a permanent move, and we are going to say that he's a
resident of California. The Bracamontes are really,
really different than that. And this is an important
distinction. They left, and they never came back. They
left, and they've been in Nevada for 12 years. So to
believe the argument of the Franchise Tax Board, you'd
have to believe that they had rented that apartment, but
they never really intended to move to Nevada yet.
You would have to believe that they did all of
those things, but their intention was not to move. And we
know that's not true because of their behavior for the
last 12 years. What the Bracamontes did at the end of
February was to indicate their current intention to
abandon the old domicile and establish a new one. And
that's the test. That's the Chapman v Superior Court case
if you want it, but there are a number of different cases.
Their intention to abandon their old domicile and
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 214
establish a new one, what else could their activities at
the end of February be but a clear indication of their
intention to go to Nevada. You can't interpret it any
other way. It was nothing else. It wasn't a vacation.
It wasn't a maybe this will work out, and we'll go back.
There's been no evidence of that. This was the first step
in the move and a whole bunch of other steps too. These
were the first 20 steps in the move. And so what the
Bracamontes did at the end of February was to establish
their evidence. You can see it. It's objective evidence
of their current intention to abandon California and move
to Nevada.
Now, the Franchise Tax Board, as it should,
discuss a number of those Bragg factors, which are also
set forth in Mazer and lots of other cases; which is what
we sort of look at to say, let's assume they are domiciled
in California, and let's look at residency. But as we
just discussed, we're not assuming they are domiciled in
California. We believe the evidence shows their domicile
actually changed on approximately the 27th of February to
Nevada.
But even if they are domiciled in California,
they are not in California. They cannot be subject to
California taxation, you know. And I really appreciate
the chart that the Franchise Tax Board put together for
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 215
the year with red the danger color showing they were in
California with green in Nevada. But I'd like to
actually -- and then what they said was that clearly shows
is that they moved in September. Actually, if you look at
it, it clearly shows that they moved in June if you draw
that line.
And can we see that chart? Could you put that
chart back up for us? You did a good job. Thank you for
doing it. And if you could show the whole year, I would
appreciate it. I know that was a challenge last time.
(Wherein a chart was displayed onscreen.)
MR. MARKOW: Thank you so much, Counsel. I
really appreciate it.
So if you take a look at this, it shows a whole
lot of California at the beginning of the year. But then
at about mid to end of June, California really goes by the
wayside; and we've got a lot of neither California or
Nevada starting at the end of June, a little bit of
California, a fair amount of not Nevada and a lot of
Nevada.
So, you know, counsel for the FTB said this chart
really illustrative and then if the move happened in
September. Well, it really isn't. I think if you were to
take a look at this and say where does the -- if you were
to do a -- sort of a regression analysis of where these
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 216
data points lay, you'd see that the line goes through
about the end of June. You know, the heavy weight of it
is at the beginning of the year, and there's very little
after -- after, say, June 25th. There's just a handful of
days in California, and the rest either Nevada, elsewhere,
or elsewhere.
So thank you, Counsel. I really appreciate it.
You could take it down now. I appreciate it.
So, you know, it's really interesting they are
sort of counting the days. Now, it's our contention that
the moved happened on the 27th of February. But if you go
with that chart, the move happened in June. Either way,
the Jimsair transaction was after the move and not before.
And you know what else has been really important here, and
I think we should lay this out very clearly.
There is no evidence that this move was spurred
by the Jimsair transaction or the promise of the Jimsair
transaction. There has been insinuation that that must be
the case. But every piece of evidence that we've seen is
that that transaction was not even known to the
Bracamontes until May, long after they rented the
apartment, registered to vote, registered their cars, got
their driver's licenses, opened bank accounts, got a post
office box. All that stuff happened months before they
knew the sale was going to happen.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 217
This isn't a situation where they say, oh, we're
doing a transaction. Let's get out of Dodge. This is a
situation where they said, "Let's move." They did, and
then lightning struck. It happened to be in their favor,
but it was an absolute moment of serendipity when the
Jimsair transaction, the sale to Landmark happened
starting in early May. But I want to be clear about that
because the FTB does insinuate that this had to have been
some sort of setup. But there's absolutely no evidence in
that.
So anyway, I was about to start marching through
the Bragg factors and applying what we heard today to
those factors. Now, at the beginning I sort of promised
you what the evidence was going to show, and I think it's
come in pretty much what we promised. And I'm -- I'm
using the Bragg factors as they are organized in the Mazer
case. Because the Mazer case separates the Bragg factors
into three general areas.
Last of the areas, but the one that the FTB
focused most on is physical presence and property in
California. And the first factor there is the location
and approximate sizes and values of residential real
property. And what the Franchise Tax Board in essence
argues is, while they owned property in California, but
they only rented property Nevada. So we know they are
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 218
really California residents because they only have this
rental in Nevada. That's not the test.
First of all, they held that California property
for years, literally, more than a decade after the
Franchise Tax Board admits that the move to Henderson
occurred. The move to Henderson occurred on the 29th of
September 2008. According to Franchise Tax Board, that
property was not sold until 2017. And so if that property
was important, they would never have left California
because they owned it for a very long time. But that's
not the case with this situation it.
This is a situation where the Bracamontes did
what a reasonable person would do. They rented an
apartment to try to figure out where they're going to buy
a house in Nevada. The Franchise Tax Board also
insinuated, you couldn't afford that. You're faking it.
You weren't really looking for a house. But what the
evidence was -- and I want to be clear about what Phil
Bracamonte said was -- he owns all of Jimsair, and he
could cause Jimsair, which had millions of dollars in the
point, to lend him the money to buy whatever house he
wanted in Nevada.
So he was ready willing and able to buy real
property in Nevada the moment they rented that house.
What you also heard was they were actively searching for a
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 219
house to buy. They were going to open houses. They were
going to auctions. They hired a realtor. They were doing
what people do when they are looking for a permanent home
as opposed to the outpost when you move someplace.
The next point is where the spouse and children
reside. And, again, what we heard was all of the
Bracamontes' children are adult children. Although they
do live in California, the Bracamontes visit them and
their grandchildren. What the test in Bragg is really
referring to are school-age children and where do they go
to school and -- and, you know, dependent children. They
may not be school-aged children.
And where the taxpayer's spouse resides. And
what we heard was that predominantly, Jacqueline and Phil
live in the same place. Although, Jacqueline did testify
that there were occasions when she would be in Nevada when
Phil was in California when she would be looking for real
property to own during this important period between
February and September of 2008.
The next factor in Bragg are the telephone
records, and we don't really have records of calls or the
origins of calls in this case. But what we do have is
that the Bracamontes obtained cell phones on the 27th of
the February in Nevada with Nevada phone numbers. It is
possible that they also maintained California cell phones
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 220
for the next few months. They couldn't remember, and the
bills do show payments to Verizon. So we can probably
assume they were running two sets of phones at that time.
I don't know how that comes out. It seems to be a wash.
You've got phones in both places.
The origin point of the taxpayer's checking
account and credit card transactions, which are actually
two different questions. Because where the checking
account is, is different than where you are making your
charges. Where you're making your charges is where you
are. And, in fact, in essence, it overlaps with your
physical presence. It usually does. Maybe there are
online charges that are irrelevant to that.
Here what we saw, and we talked about this
moments ago, was that bank accounts were immediately
opened by the Bracamontes in Nevada, and they became their
primary bank accounts. And, eventually, the California
bank accounts were closed, and they were closed shortly
before the Jimsair transaction. The credit card
transactions goes into the number of days. And we talked
a little bit about the number of days.
You know, again, the Franchise Tax Board would
have you believe that people move and basically never go
back. Certainly that does happen, but it does not always
happen. And it certainly does not always happen when you
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 221
live a four- or five-hour drive away from where you've
moved from, and you still have kids there and a sick
father there. So what they would say is, well, when you
have kids and a sick father and you come back and visit
them, you haven't really left.
And that's not -- that just doesn't comport with
the way people behave. And it doesn't comport with the
test here, the domicile test about intention and actual
emotion and the reason for the visits. And what we can
see is, is the diminishing visits over time, which is
utterly consistent with wrapping up loose ends in a move.
If the Franchise Tax Board's arguments were to be
accepted, you could not wrap up those loose ends. Those
loose ends would tie you to where you came from until you
wrapped them up. And that's just not -- you might never
leave. Sometimes those loose ends takes years to wrap up.
Here they just took a few months. But the tests don't
talk about that. And when you take a look at all of the
days and what they were doing -- and I think counsel for
the FTB accurately summarized what the testimony was.
They were taking care of sick relatives. They
were going to graduations. They were closing up their
house and residence. And they were taking care of
wrapping up some business issues, and then they did that.
And then they were gone. But most of the stuff had
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 222
already happened in Nevada. And really the number of days
is FTB's best case here. FTB -- everything else kind of
factors hard against them. But if you look at the number
of days and you think, well, that's a lot of days. I'm
worried about that.
But the Bracamontes have a very good explanation
for that. That was them wrapping them things up. It
didn't mean that the locust of the -- the sort of the
weight of the move hadn't happened. It had happened, and
they were just wrapping things up, and that diminished
quickly over time. That's the first set of factors in the
Bragg Mazer formulation.
The next is employment. And what was interesting
was the bank records that FTB's counsel showed. Well,
first of all, let's talk about employment. What Phil
testified to was he had an office in an outbuilding with
no windows. And went in a little bit whenever he was in
town, but that he had no responsibilities. And that was
from 2003 to 2008. Then on February 28th or 29th he got
his last paycheck. And the financial records that the FTB
put in showed that. There were no more payments after
that.
The W-2 shows more payments, but we don't know
about that. The Bracamontes couldn't remember it, and
it's not in the bank records. So for all we know it was
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 223
something that came out of the transaction. We don't know
what that is. But what we do know is there is no record
of payments after the 29th of the February, and Phil
testified he didn't do anything after the 29th of
February.
So his employment ended at the time they went to
Henderson and they rented that apartment and did all of
those things. The children's school is not relevant here.
Although, it's part of the Bragg test. We talked about
bank and savings accounts. We haven't talked anything
about social, religious, and professional organizations.
And I don't know how that cuts, but I don't think they had
them here, and I don't think they have them here. So, you
know, it's neither one.
The use of professional services, such as
doctors, dentists, accountants, and attorneys, well, what
did we hear? We heard that they did hire an attorney to
do an important thing actually, to change their trust from
a California trust to a Nevada trust. If you're not
moving, you don't do something like that. And they hired
that attorney in May. They talked about how they started
to use medical professionals, but that process took time.
And indeed, what Phil said was until last year he
was coming here to deal with his hearing aids. And,
again, that long tale of a move, it doesn't mean he didn't
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 224
move, you know, before he stopped going to hearing aid
doctor here. It means it takes a while to transition
things, sometimes as much as 12 years, apparently.
The next is maintenance and ownership of business
interest. And, fairly, that completely favors California
because he owned Jimsair. And that was his business
interest. But what we talked about was his actual -- you
know, how active was he and how passive was he? But he
was an owner, and that was here. He doesn't have
professional licenses. He doesn't own investment real
property. So those were -- those were non-factors. And
we didn't have any half testimony or evidence from third
parties. Those remaining factors are not present here and
favored over.
Lastly, there are the registrations and filings
with states or other agencies. We talked about those.
Those heavily favored the Bracamontes' February residency
and domicile in Nevada. It's automobile registration,
which we've talked about. Although, I want to touch on
something there. I think I have already, about the
Avalanche and the leased car. The other cars weren't
their main cars, and they either kept them in California
or moved them to Arizona. I don't think they ever
registered them in Nevada.
And further, the sort of insinuations that when
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 225
Nevada requires that you register vehicles, it's not
really applicable. It requires that you register vehicles
in Nevada. Those are -- and you're using in Nevada, not
that you're using elsewhere. All these, sort of, what I
think counsel for the FTB properly called toys, are
registered elsewhere because they're not being used in
Nevada in any significant way.
Driver's license we've talked about. Voter
registration and participation, I thought it was really
interesting. You know, a vote in California in early
February is -- is completely irrelevant to whether you
moved later in February. It's just, okay, they voted in
California on February 5th. It doesn't mean that they
didn't change their domicile and changed their residency
on February 27th. And indeed, that was their last one in
California, and all the subsequent votes were in Nevada.
And then there are -- is the address used and
state of residence claimed on tax returns. And pre-2008
that was in California, and post 2008 that was in Nevada.
So when you tally up these factors and you sort of look at
from a holistic perspective, what really happened here?
What we can see is they were determined to move. They
took the steps the move. They showed their intention to
move. They showed their intention to change their
domicile, and they did almost all of that at the end
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 226
February. Everything else was a clean-up. And so when
you put all those together, I think the evidence is pretty
overwhelming that the domicile changed, and the residence
changed on February 27.
I want to briefly touch on the penalty because
the penalty only is -- it falls out of the residency
issue. If you find that the domicile and residency
changed before -- before July -- excuse me -- indeed
before July 18th, 2008, then they properly didn't file a
to 2009 tax return. If you find that it happened after
and the Jimsair transaction, in essence, part of
California 2008, then they should have filed 2009 and did
not. And it stands or falls on the outcome of the
residency determination.
So at the end of this, we're going to ask you to
apply the Bragg case, apply the Mazer case, apply all the
cases the FTB told you about and find that the domicile
and residency of the Bracamontes was fixed in Nevada on
the 27th of February 2008.
Thank you.
JUDGE TAY: Mr. Markow, thank you very much.
I'd like to turn to my panelists at this point to
open it for any questions they might have for either
party. So I'm going to first ask Judge Johnson if he has
any questions for the parties.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 227
JUDGE JOHNSON: This is Judge Johnson. No
questions. Thank you.
JUDGE TAY: Thank you, Judge Johnson.
And Judge Le, any questions for the parties?
JUDGE LE: Just one quick question. The calendar
that was showed, that's not part of any exhibits; right?
MR. HOFSDAL: No, no. It's not an exhibit.
It's -- the calendar itself, if you go to Exhibit F, pages
4 to 6, that's just a representation of the days that
Mr. and Mrs. Bracamonte represented that they were in the
various locations. So if you're curious about what was
going on in this month or this month, all you have to do
is go to Exhibit F, pages 4 to 6, and you'll get the
Bracamontes' account of days.
JUDGE LE: Okay. Thank you. No further
questions.
JUDGE TAY: Thank you, Judge Le.
I just have one question for Mr. Markow. Can you
respond to Franchise Tax Board's contention that a
taxpayer can be a resident of two states or more than one
state?
MR. MARKOW: As I understand -- thank you,
Judge Tay. I understand that to be a correct statement of
the law. I understand that you have one domicile but can
have any number of residents. I'm sure Phil Jelsma will
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 228
jump in and tell me if I'm wrong.
MR JELSMA: I would never do that. So I think
that's correct.
MR. MARKOW: Strangely you do it all the time,
but thank you. So I understood that's FTB's statement was
an accurate statement.
JUDGE TAY: Okay. All right. I think we do not
have any further questions. I want to thank both parties
for their presentations. And I want to especially thank
the Bracamontes for appearing and sitting through the
hearing and presenting their story as well.
The record in this appeal is now closed, and the
appeal will be submitted for decision. We will endeavor
to send you our written decision no later than 100 days
from today.
This hearing is now adjourned, and I just want to
wish everyone a safe and happy holiday.
(Proceedings adjourned at 5:45 p.m.)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
STATE OF CALIFORNIA OFFICE OF TAX APPEALS 229
HEARING REPORTER'S CERTIFICATE
I, Ernalyn M. Alonzo, Hearing Reporter in and for
the State of California, do hereby certify:
That the foregoing transcript of proceedings was
taken before me at the time and place set forth, that the
testimony and proceedings were reported stenographically
by me and later transcribed by computer-aided
transcription under my direction and supervision, that the
foregoing is a true record of the testimony and
proceedings taken at that time.
I further certify that I am in no way interested
in the outcome of said action.
I have hereunto subscribed my name this 8th day
of January, 2021.
______________________ ERNALYN M. ALONZO HEARING REPORTER
Top Related